Form 10-Q NextTrip, Inc. For: May 31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
OR
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated Filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of July 14, 2026, the issuer had shares of common stock outstanding, inclusive of 96,774 shares of common stock classified as mezzanine equity.
NEXTTRIP, INC.
FORM 10-Q
TABLE OF CONTENTS
| 2 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEXTTRIP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| May 31, 2026 | February 28, 2026 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Security deposit | ||||||||
| Goodwill | ||||||||
| Equity investments | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Derivative liability | ||||||||
| Contingent consideration | ||||||||
| Licensing & royalty payment obligations, current portion | ||||||||
| Note payable | ||||||||
| Notes payable - related parties | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| SBA EIDL loan | ||||||||
| Licensing & royalty payment obligations, net of current portion | ||||||||
| Line of Credit – related parties | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 13) | ||||||||
| Mezzanine Equity | ||||||||
| Preferred Stock, par value $; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Common Stock, par value $; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Total Mezzanine Equity | ||||||||
| Stockholder’s Equity | ||||||||
| Preferred Stock, par value $; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Common Stock, par value $; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional Paid in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities, Mezzanine and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to condensed financial statements.
| 3 |
NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended May 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue (exclusive of depreciation and amortization, shown separately below) | ( | ) | ( | ) | ||||
| Gross profit (loss) | ||||||||
| Operating Expenses: | ||||||||
| Salaries and benefits | ||||||||
| Stock based compensation | ( | ) | ||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Professional service fees | ||||||||
| Technology | ||||||||
| Organization costs | ||||||||
| Depreciation and amortization | ||||||||
| Provision for credit loss | ||||||||
| Other expenses | ||||||||
| Total Operating Expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other Income (Expenses) | ||||||||
| Loss on extinguishment of liability | ( | ) | ||||||
| Gain on derivative liability | ||||||||
| Interest income (expense), net | ( | ) | ( | ) | ||||
| Other income (expense) | ( | ) | ||||||
| Total Other Income (Expense) | ( | ) | ||||||
| Net loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss before share of net loss in equity method investee | ( | ) | ( | ) | ||||
| Share of net loss of equity method investee | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Preferred dividends | ( | ) | ( | ) | ||||
| Net Loss Applicable to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ) | $ | ) | ||||
| Basic and diluted weighted average number of common shares | ||||||||
See accompanying notes to condensed financial statements.
| 4 |
NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended May 31, 2026, and May 31, 2025
| Preferred Stock | Common Stock | Additional | ||||||||||||||||||||||||||
Shares Outstanding | Preferred Stock | Shares Outstanding | Common Stock | Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balances, February 28, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Preferred stock dividends | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Issuance of securities pursuant to private placements | ||||||||||||||||||||||||||||
| Issuance of common shares for third party services | - | |||||||||||||||||||||||||||
| Issuance of investor warrants pursuant to preferred private placement | - | - | ||||||||||||||||||||||||||
| Issuance of placement agent warrants pursuant to preferred private placement | - | - | ||||||||||||||||||||||||||
| Issuance of securities for equity investments | - | |||||||||||||||||||||||||||
| Offering costs | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Stock based compensation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balances, May 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Preferred Stock | Common Stock | Additional | ||||||||||||||||||||||||||
| Shares Outstanding | Preferred Stock | Shares Outstanding | Common Stock | Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balances, February 28, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Preferred Stock Dividends | - | ( | ) | |||||||||||||||||||||||||
| Preferred Shares Issued for FSA Travel, LLC acquisition | - | |||||||||||||||||||||||||||
| Issuance of common shares for Journy.tv asset acquisition | - | |||||||||||||||||||||||||||
| Issuance of common shares pursuant to reverse acquisition of Sigma | - | ( | ) | |||||||||||||||||||||||||
| Issuance of common shares for services | - | |||||||||||||||||||||||||||
| Warrants issued in connection with debt conversion | - | - | ||||||||||||||||||||||||||
| Warrants issued in connection with bridge loan financing | - | - | ||||||||||||||||||||||||||
| Issuance of securities for directors’ services | - | - | ||||||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Balances, May 31, 2025 | ( | ) | ||||||||||||||||||||||||||
See accompanying notes to condensed financial statements.
| 5 |
NEXTTRIP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | ||||||||
| May 31, 2026 | May 31, 2025 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Income (Loss) – Continuing Operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities: | ||||||||
| Noncash Expenses: | ||||||||
| Depreciation and amortization – property and equipment and intangibles | ||||||||
| Amortization of debt discount | ||||||||
| Provision for credit loss | ||||||||
| Gain on derivative liability | ( | ) | ||||||
| Shares issued for professional services | ||||||||
| Stock-based compensation - employees | ( | ) | ||||||
| Stock-based compensation - directors | ||||||||
| Loss on extinguishment of liability | ||||||||
| Change in Assets and Liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Related party receivable | ( | ) | ||||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Licensing & royalty payment obligations, current portion | ||||||||
| Licensing & royalty payment obligations, net of current portion | ( | ) | ||||||
| SBA loan | ( | ) | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Capitalized software development costs | ( | ) | ( | ) | ||||
| FSA Travel LLC acquisition | ( | ) | ||||||
| JOURNY.tv asset purchase | ( | ) | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of preferred shares | ||||||||
| Proceeds from issuance of common shares | ||||||||
| Notes Payable | ( | ) | ||||||
| Advances from related parties | ||||||||
| Proceeds from issuance of Mezzanine Equity | ||||||||
| Offering Costs | ( | ) | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| NET CHANGE IN CASH FOR PERIOD | ( | ) | ( | ) | ||||
| CASH AT BEGINNING OF PERIOD | ||||||||
| CASH AT END OF PERIOD | $ | $ | ||||||
| Supplemental Disclosures: | ||||||||
| Noncash Investing and Financing Activities Disclosure: | ||||||||
| Issuance of preferred shares pursuant to FSA Travel, LLC acquisition | $ | $ | ||||||
| Issuance of common shares pursuant to JOURNY.tv asset purchase | $ | $ | ||||||
| Issuance of common shares for third party services | $ | $ | ||||||
| Issuance of common stock warrants in connection with private placement | $ | $ | ||||||
| Preferred stock dividends | $ | $ | ||||||
| Disclosure of Cash Paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income Taxes | $ | $ | ||||||
See accompanying notes to condensed financial statements.
| 6 |
NEXTTRIP, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
May 31, 2026
NOTE 1 - Business Description and Going Concern
Sigma Additive Solutions, Inc. (“Sigma”), the legal acquiror of NextTrip Holdings, Inc., was initially incorporated as Messidor Limited in Nevada on December 23, 1985, and changed its name to Framewaves Inc. in 2001. On September 27, 2010, the name was changed to Sigma Labs, Inc. On May 17, 2022, Sigma Labs, Inc. began doing business as Sigma Additive Solutions, and on August 9, 2022, changed its name to Sigma Additive Solutions, Inc.
On March 11, 2024, Sigma filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada, pursuant to which, effective as of 12:01 a.m. Pacific time on March 13, 2024, among other things, Sigma’s corporate name was changed from Sigma Additive Solutions, Inc. to “NextTrip, Inc.”
The Company’s corporate office is located at 1560 Sawgrass Corporate Parkway, Suite 400, Sunrise Florida 33323. The consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries, NextTrip Holdings Inc. incorporated on October 22, 2015, Extraordinary Vacations USA, Inc., incorporated on June 24, 2002, Five Star Alliance, LLC, organized on March 9, 2018, and TA Pipeline, LLC, organized on July 1, 2021.
Prior
to the NextPlay Exchange Agreement, as described below, NextTrip Holdings, Inc. (“NTH”) was a wholly-owned subsidiary of
NextTrip Group, LLC (“NTG”), which in turn, was a wholly-owned subsidiary of NextPlay Technologies, Inc. (“NextPlay”).
All of the business operations of NTG were conducted through its subsidiaries. On January 25, 2023, NextPlay and NTG entered into an
Amended and Restated Separation Agreement, Amended and Restated Operating Agreement, and Exchange Agreement (the “NextPlay Exchange
Agreement”), whereby NextPlay transferred its interest in the travel business to NTG. Pursuant to the NextPlay Exchange Agreement,
NextPlay exchanged Membership Units of NTG for Preferred Units of NTG, with a value of $ per unit. Prior to the
exchange for Preferred Units, NTG had a payable due to NextPlay of $, representing cash advances and payment of expenses by
NextPlay on behalf of NTG, while NextPlay had obligations to provide ongoing support to NTH. Such liability was settled by the issuance
of the Preferred Units and the waiver of all of NextPlay’s ongoing support obligations except for a $
The Company provides travel technology solutions with sales originating in the United States, with a primary emphasis on hotels, air, and all-inclusive travel packages. Our proprietary booking engine, branded as NextTrip 2.0, provides travel distributors access to a sizeable inventory.
The
Company owns
Reverse Acquisition
On October 12, 2023, the Company (then known as Sigma) entered into a Share Exchange Agreement (as amended, the “Exchange Agreement”) with NTH, NTG, and William Kerby (the “NextTrip Representative”). Under the terms of the Exchange Agreement, the parties agreed that NTG would sell and transfer to the Company all of the issued and outstanding shares of NTH in exchange for restricted shares of Company common stock (the “Closing Shares”), issuable at closing, and the right to receive up to an additional restricted shares of Company common stock upon satisfaction of certain milestones set forth in the Exchange Agreement (the “Contingent Shares,” and together with the Closing Shares, the “Restricted Shares”), which Restricted Shares are issuable to the members of NTG, on a pro rata basis, under the terms of the Exchange Agreement, subject to certain closing conditions (the “NextTrip Acquisition”). Upon the closing of the NextTrip Acquisition on December 29, 2023, NTH became a wholly-owned subsidiary of the Company.
| 7 |
The Contingent Shares, together with the Closing Shares, will not exceed shares of Company common stock, or approximately % of the issued and outstanding shares of Company common stock immediately prior to the closing. At closing, it was determined that the NextTrip Acquisition would likely result in a change of control, with the members of NTG receiving an aggregate number of shares that exceeds the number of shares held by the legacy shareholders of Sigma, which change in control occurred upon the issuance of certain of the Contingent Shares on March 26, 2025. As a result, the NextTrip Acquisition is accounted for as a reverse acquisition of NTH by the Company, whereby the Company is treated as the legal acquirer and NTH is treated as the accounting acquirer. As a result, the historical financial information for the periods prior to closing of the NextTrip Acquisition presented is that of NTH.
In accordance with ASC 805-40-45-1, the consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (NextTrip, Inc., f/k/a Sigma Additive Solutions, Inc.) but described in the notes to the financial statements as a continuation of the financial statements of the legal subsidiary (NTH), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent.
Under ASC 805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:
| (a) | The assets and liabilities of the legal subsidiary recognized and measured at their pre-combination carrying amounts; | |
| (b) | The assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business combinations (ASC 805); | |
| (c) | The retained earnings and other equity balances of the legal subsidiary before the business combination; | |
| (d) | The amount required to be recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity structure of the legal parent, including the equity interests the legal parent issued to affect the combination. Accordingly, the equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition. |
The assets and liabilities of Sigma were recognized at fair value pursuant to ASC 805.
Going
Concern - As of May 31, 2026, and February 28, 2026, the Company had an accumulated deficit of $
In light of the foregoing, there is substantial doubt about the Company’s ability to continue as a going concern for 12 months from the date of the filing of this Report.
| 8 |
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation - The accompanying financial statements have been prepared by the Company in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America. The financial statements have been prepared on a consolidated basis with those of the Company’s wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at May 31, 2026 and 2025 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company suggests these condensed financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2026. The results of operations for the period ended May 31, 2026 are not necessarily indicative of the operating results for the full year.
Reclassification
Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on the net earnings (loss) or financial position.
Fair Value of Financial Instruments - The Company applies ASC 820, “Fair Value Measurements.” This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
| ● | Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| ● | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
| ● | Level 3 - inputs to valuation methodology are unobservable and significant to the fair measurement. |
The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables, accounts payable, and accrued liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.
Put Option
The Company does not use derivative instruments for hedging of market risk or for trading or speculative purposes. The derivative liability at May 31, 2026 results from an option (the “Put Option”), which is embedded in the restricted common shares issued by the Company pursuant to the acquisition of TA Pipeline LLC (“TA”).
On August 6, 2025, the Company entered into a Membership Interest Purchase Agreement (the “TA MIPA”) with TA and the members of TA (the “TA Members”), pursuant to which the Company purchased all of the issued and outstanding membership interests of TA from the TA Members (the “TA Acquisition”), resulting in TA becoming a wholly owned subsidiary of the Company. The TA Acquisition closed on August 6, 2025 (the ‘Closing Date”).
Pursuant
to the TA MIPA, as consideration for the TA Acquisition, at closing, the Company (i) paid the TA Members an aggregate of $
| 9 |
In the event that the Fair Market Value of the Company’s common stock is less than $ (the “Base Price”) during the three month period starting on the earlier of (1) the date on which the restricted shares of the Company’s common stock becomes eligible for public resale, and (2) the date that is twelve months after the Closing Date, each TA Member shall have the limited, one time option to exercise one of the following rights as to some or all of their outstanding TA Closing Shares and TA Milestone Shares (together the “TA Acquisition Shares”), by delivering notice to the Company: (i) the right to require the Company to repurchase from the TA Member all or any portion of their outstanding TA Acquisition Shares at the Base Price; (ii) the right to require the Company to issue to such TA Member that number of additional shares of Company common stock (the “Top Up Shares”) as is necessary to make the aggregate value of the number of TA Acquisition Shares (based on the Fair Market Value) equal to the original aggregate value of the TA Acquisition Shares (based on the Base Price) for the number of TA Acquisition Shares specified in the exercise notice; and (iii) the right to require the Company to pay to such TA Member, in cash, an amount equal to the product of (x) the number of TA Acquisition Shares specified in the exercise notice and (y) the positive difference, if any, between the Base Price and the Fair Market Value.
Pursuant to ASC 815, management evaluated the Put Option embedded in the common shares and determined that such Put Option required bifurcation and will be accounted for as a derivative liability. The Put Option applicable to the TA Acquisition Shares will be marked to market at each reporting period.
Classification of TA Pipeline Closing Shares
Although the TA Closing Shares are legally common stock, they are classified as mezzanine equity on the consolidated balance sheet due to contingent redemption rights resulting from derivative liability provisions that could require cash or share settlement outside the Company’s control.
Accordingly, these shares are presented outside of permanent stockholders’ equity and below total liabilities. The Company will continue to classify the shares as mezzanine equity until such time as the redemption provisions lapse or are removed, or until settlement occurs.
Initial and Subsequent Measurement
The carrying amount of instruments recorded within mezzanine equity are not adjusted below initial measurement. The TA Acquisition Shares were initially recorded at $ per share, which was the closing prices of our stock on the acquisition date. The Put Option has an exercise price of $ per share. As such, the TA Acquisition Shares will not be subsequently remeasured in future reporting periods
TA Milestone Payment
In
addition to the TA Closing Consideration, and as further consideration for the TA Acquisition,
The fair values of the Put Option and the TA Milestone Payment measured on a recurring basis are as follows:
| May 31, 2026 | Date of Issuance – August 6, 2025 | |||||||||||
| Fair Value | Input Level | Fair Value | Input Level | |||||||||
| Derivative liability – Put Option | $ | Level 3 | $ | Level 3 | ||||||||
| Contingent Consideration – TA Milestone Payment | $ | Level 3 | $ | Level 3 | ||||||||
| 10 |
The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3):
| Put Option | TA Milestone Payment | |||||||
| Fair Value on Issuance Date | $ | $ | ||||||
| Change in fair value | $ | ( | ) | |||||
| Fair value on May 31, 2026 | $ | $ |
Helena Global Investment Opportunities 1 Ltd. Private Placement
Classification of Redeemable Convertible Preferred Stock
The Company classifies its Series B Convertible Preferred Stock as mezzanine equity in accordance with ASC 480-10-S99-3A because the redemption obligation, while at a fixed date, is not unconditional from the Company’s perspective. The holder retains the right to convert the Series B Preferred Stock into Common Stock at any time prior to the mandatory redemption date and the right to elect a one-time extension of the mandatory redemption date. As a result, whether redemption occurs (in cash) or is settled through conversion (in shares), and the timing of any such redemption, is outside the Company’s sole control. The Series B Convertible Preferred Stock is presented between liabilities and stockholders’ equity on the balance sheet.
Initial Measurement
Proceeds from the issuance of the Series B Convertible Preferred Stock and detachable Investor Warrant are allocated to the two freestanding instruments using the relative fair value method pursuant to ASC 470-20-25-2. The portion of proceeds allocated to the Investor Warrant is credited to additional paid-in capital. The portion of proceeds allocated to the Series B Convertible Preferred Stock, net of debt issuance costs and original issue discount associated with issuance fee shares issued for no consideration, represents the initial carrying value of the mezzanine preferred.
Subsequent Measurement
The mezzanine carrying value of the Series B Convertible Preferred Stock is accreted to its redemption value over the period from issuance to the mandatory redemption date using the effective interest method. Accretion and stated dividends accrued on the Series B Convertible Preferred Stock are recognized as charges to retained earnings (deemed dividends to the holder) and reduce net income available to common shareholders for purposes of basic and diluted earnings per share calculations pursuant to ASC 260-10-S99. Accreted amounts and dividends are not recognized as interest expense in the income statement.
Warrants
The Company evaluates each freestanding warrant issued in connection with the Series B Convertible Preferred Stock for liability versus equity classification under ASC 815-40 at the issuance date and at each subsequent reporting date. The Investor Warrant and the Placement Agent Warrants are each classified as equity instruments at issuance based on the warrants’ indexation to the Company’s own stock and settlement provisions (including the absence of any cash-settled Black-Scholes payout obligation upon a Fundamental Transaction).
Investments in Equity Method Investees
The Company holds investments in certain entities that are accounted for under the equity method of accounting, as well as investments that are accounted for under the fair value method pursuant to ASC 321, “Investments - Equity Securities.” Under the equity method, investments in entities in which the Company has significant influence, but not control, are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the investees’ earnings or losses and other comprehensive income.
| 11 |
The Company determines the existence of significant influence based on various factors, including representation on the investees’ board of directors, participation in policy-making processes, and material intercompany transactions.
The Company’s equity method investments are evaluated periodically for impairment by assessing whether events or changes in circumstances indicate that the carrying value of the investment may not be recoverable. When such indicators exist, the Company performs an impairment test and recognizes an impairment loss to the extent that the carrying amount of the investment exceeds its fair value.
Distributions received from equity method investees that exceed cumulative earnings recognized by the Company are considered a return of investment and are recorded as a reduction in the carrying amount of the investment.
Adjustments resulting from changes in the Company’s ownership interest in equity method investees that do not result in a loss of significant influence are accounted for prospectively.
Basis Difference
In accordance with ASC 323, “Investments - Equity Method and Joint Ventures,” the Company records a basis difference when the carrying value of its equity method investment differs from its share of the investee’s fair value of net assets at the acquisition date. This basis difference is allocated to the investee’s identifiable assets and liabilities based on their fair values. The amortization of any basis difference related to depreciable assets, such as property, plant, and equipment, is recognized in the Company’s share of the investee’s earnings or losses. Any basis difference related to non-depreciable assets, including goodwill, is generally not amortized, but is subject to impairment testing as necessary.
The Company assesses the impact of any basis differences on its earnings and the carrying value of its equity method investments. If a basis difference is determined to exist, the appropriate adjustments are made to reflect the amortization of such differences in the consolidated financial statements.
Investments in Equity Securities without Readily Determinable Fair Value
In accordance with ASC 321-10-35-2, the Company holds certain investments in equity securities in which the Company does not have significant influence or control, and for which fair value is not readily determinable. These investments are primarily accounted for at cost, less any impairment. The carrying amount is periodically evaluated for impairment, and if necessary, an impairment loss is recognized in the statement of operations. These investments are not adjusted for unrealized gains or losses unless an impairment is identified.
Equity in Earnings of Equity Method Investees
The Company’s share of earnings or losses from equity method investees is recognized in the consolidated statement of operations within “Equity in share of loss of equity method investees,” net of any related income taxes.
| May 31, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| Stock Options | ||||||||
| Preferred Stock | ||||||||
| Total Underlying Common Shares | ||||||||
| 12 |
| Three Months Ended May 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Preferred dividends | $ | ( | ) | $ | ( | ) | ||
| Net loss applicable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding used in loss per share during the period (denominator) | ||||||||
Dilutive
loss per share was not presented, as the Company’s outstanding common and preferred warrants, stock options and preferred stock
common equivalent shares for the periods presented would have had an anti-dilutive effect. At May 31, 2026, the Company had outstanding
warrants to purchase
Accounting Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management. Significant accounting estimates that may materially change in the near future are impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts.
Revenue Recognition – The Company’s revenue is derived primarily from sales of our software and related hardware suite under perpetual licenses and from providing engineering services under contracts. The Company recognizes revenue in accordance with ASC Topic No. 606. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition guidance under prior GAAP and replaced it with a principles-based approach for determining revenue recognition. The core principle of the standard is the recognition of revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In general, we determine revenue recognition by: (1) identifying the contract, or contracts, with our customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.
The Company recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel and the date of cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably assured. Revenue for customer travel packages purchased directly from the Company are recorded gross (the amount paid to the Company by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).
The Company generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world.
The Company controls the specified travel product before it is transferred to the customer and is therefore a principal, based on but not limited to, the following:
| ● | The Company is primarily responsible for fulfilling the promise to provide such travel product. |
| 13 |
| ● | The Company has inventory risk before the specified travel product has been transferred to a customer or after transfer of control to a customer. | |
| ● | The Company has discretion in establishing the price for the specified travel product. |
Payments for tours or activities received in advance of services being rendered are recorded as deferred revenue and recognized as revenue at the earlier of the date of travel or the last date of cancellation (i.e., the customer’s refund privileges lapse).
Segment Reporting - In response to recent acquisitions and expanded business activities, during the third quarter of fiscal year 2026, our Chief Operating Decision Maker (“CODM”), who is our Chief Executive Officer, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, we have updated our reporting and beginning in the third quarter of fiscal year 2026, we reported our financial performance based on our new segments, “Travel” and “Media”. A detailed description of our operating segments as of May 31, 2026 can be found in NOTE 15 to the Financial Statements and the Overview section of Item 2 of this Quarterly Report, entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Prior periods have been recast to conform to these newly identified segments.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker (“CODM”) and included in the measure of segment profit or loss, an amount and description of other segment items, the title and position of the CODM, and application of the segment disclosure requirements to interim periods. The Company adopted ASU 2023-07 for its fiscal year beginning March 1, 2025. The Company began reporting under its Travel and Media reportable segments, and reflecting the interim disclosure provisions of ASU 2023-07, in the third quarter of fiscal year 2026 (the quarterly period ended November 30, 2025); prior periods have been recast to conform to the current segment presentation. Adoption affected disclosures only and did not affect the Company’s condensed consolidated financial position, results of operations, or cash flows.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The Company adopted ASU 2023-09 on a prospective basis effective for its fiscal year beginning March 1, 2025 (fiscal year ended February 28, 2026). The amendments affect annual income tax disclosures only and do not establish new interim disclosure requirements; adoption did not affect the Company’s condensed consolidated financial position, results of operations, or cash flows, or its interim income tax disclosures.
NOTE 3 - Investment in Equity Securities
Investment in Blue Fysh Holdings Inc.
On February 24, 2025, the Company entered into a Share Exchange Agreement with Blue Fysh Holdings Inc. (“Blue Fysh”), under which the Company acquired a % ownership interest in Blue Fysh. As part of the transaction, the Company issued shares of Series N Preferred at an issuance price of $ per share, totaling $, in exchange for restricted shares of Blue Fysh common stock. The transaction closed on February 28, 2025.
The Company’s investment in Blue Fysh is accounted for under the cost method, as the Company does not have significant influence over Blue Fysh. No board appointments are contemplated as part of this transaction; however, the Company has the right to appoint a representative to the Blue Fysh Advisory Committee, which will allow the Company to receive financial updates as needed and to be informed of financial events that could significantly impact the Company’s ownership position.
Since the Company’s ownership interest does not meet the criteria for significant influence pursuant to ASC 323, this investment is classified as an equity security without a readily determinable fair value and is initially recorded at cost. The Company will assess the investment for impairment in future periods and recognize any impairment losses as necessary.
Note 4 – Acquisition of FSA Travel, LLC
On
February 6, 2025, the Company acquired a
On
April 9, 2025, the Company exercised its option to purchase the remaining
The contingent consideration issued as purchase consideration provides for additional distributions to the FSA Unitholders, the amount of which is dependent on the acquired business’ achievement of certain milestones. The Company determined the fair value of the contingent consideration as of the acquisition date (April 9, 2025) based on the probability and timing of achieving the respective milestones.
| 14 |
Upon
completion of the acquisition of the remaining
The Company has completed the analysis to assign fair values to all assets acquired and liabilities assumed. The table below sets forth the consideration paid and the fair value of the assets acquired and liabilities assumed for the acquisition:
| Consideration paid | ||||
| Cash | $ | |||
| Series O Preferred stock | ||||
| Earnout Payment | ||||
| Fair value of Initial Purchase | ||||
| Total consideration | $ | |||
| Assets acquired and liabilities assumed | ||||
| Cash and cash equivalents | $ | |||
| Accounts receivable | ||||
| Intangibles | ||||
| Goodwill | ||||
| Total assets | $ | |||
| Accounts payable | ||||
| Due to FSA Unitholders | ||||
| SBA Loan | ||||
| Total liabilities | $ | |||
| Total net assets | $ |
The fair value of the working capital items, including accounts receivable, other receivables, trade payables and deferred revenue, approximates their respective carrying values at the date in which control was obtained. Effective January 1, 2021, the Company has adopted ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which created an exception to the recognition and measurement principles of ASC 805, Business Combinations, for the Company’s contract assets and liabilities, including deferred revenue, essentially resulting in the carryover of the historical amounts determined in accordance with ASC 606, Revenue from Contracts with Customers, rather than fair value.
The fair value of the acquired tradename and acquired technology was determined using the relief from royalty method, which utilized projected financial information. The goodwill recognized in the acquisition primarily represents synergies with the existing operations of the Company, and the value of yet-to-be-acquired/developed customers, technology, assembled workforce, and any other assets.
NOTE 5 – JOURNY.tv Asset Acquisition
On April 1, 2025, the Company entered into an asset purchase agreement (the “JOURNY.tv Purchase Agreement”) with Ovation LLC (“Ovation”), pursuant to which the Company purchased assets, including without limitation trademarks, domains, apps and certain agreements, and assumed certain liabilities related to Ovation’s JOURNY.tv business (the “JOURNY.tv Acquisition”). The JOURNY.tv Acquisition closed on April 1, 2025.
| 15 |
Pursuant
to the JOURNY.tv Purchase Agreement, as consideration for the JOURNY.tv Acquisition, the Company paid Ovation $
In
connection with the JOURNY.tv Acquisition, on April 1, 2025, the Company and Ovation also entered into a License Agreement (the “License
Agreement”), pursuant to which Ovation granted the Company the non-exclusive right, throughout the territories and for the term
set forth therein, to exhibit, promote, market, advertise, publicize and/or otherwise exploit the programs listed in the License Agreement
in the media of (i) FAST via the JOURNY.tv Channel and (ii) Video On Demand via the JOURNY.tv Channel. Pursuant to the License Agreement,
Ovation shall not license any unaffiliated third party the right to exhibit certain of the programs subject to the License Agreement
and shall not use certain of the programs subject to the License Agreement on its owned or operating streaming platforms (subject to
certain exceptions). As consideration for the rights granted under the License Agreement, the Company agreed to pay Ovation an aggregate
non-refundable license fee of $
The transaction was accounted for as an asset acquisition because while inputs were acquired (in the form of trademarks, distribution agreements, content licenses, and service agreements), there is not a continuation of revenues before and after the transaction. That is, due to the significant rebranding and redevelopment of the inputs acquired, the JOURNY.tv assets are not producing revenue post-closing of the transaction. Additionally, an organized workforce with the necessary skills and experience to create outputs was not included in the transaction. As such, the transaction does not meet the definition of a business and is considered an asset acquisition.
On
the acquisition date, the fair value of the intangible assets acquired was $
NOTE 6 – Acquisition of TA Pipeline LLC
On August 6, 2025 (the “Closing Date”), the Company entered into the TA MIPA with TA and the TA Members, pursuant to which the Company purchased all of the issued and outstanding membership interests of TA from the TA Members (the “TA Acquisition”), resulting in TA becoming a wholly-owned subsidiary of the Company.
Pursuant
to the TA MIPA, as consideration for the TA Acquisition, at closing, the Company (i) paid the TA Members an aggregate of $
| 16 |
In addition to the foregoing, in the event that the Fair Market Value of the Company’s common stock is less than $ (the “Base Price”) during the applicable Exercise Period, each TA Member shall have the limited, one time option (the “Put Option”), to exercise one of the following rights as to some or all of their outstanding TA Acquisition Shares by delivering notice to the Company: (i) the right to require the Company to repurchase from the TA Member all or any portion of their outstanding TA Acquisition Shares at the Base Price; (ii) the right to require the Company to issue to such TA Member that number of additional shares of Company common stock (the “Top Up Shares”) as is necessary to make the aggregate value of the number of TA Acquisition Shares specified in the notice (based on the Fair Market Value) equal to the original aggregate value of the number of TA Acquisition Shares specified in the notice (based on the Base Price); and (iii) the right to require the Company to pay to such TA Member, in cash, an amount equal to the product of (x) the number of TA Acquisition Shares specified in the notice and (y) the positive difference, if any, between the Base Price and the Fair Market Value. For purpose of the foregoing rights, the “Exercise Period” means the three month period commencing upon the earlier of: (i) with respect to the TA Closing Shares, (x) the date that the TA Closing Shares first become eligible for public resale and (y) the first anniversary of the closing date; and (ii) with respect to the TA Milestone Shares, (x) the date that the TA Milestone Shares first become eligible for public resale and (y) the first anniversary of the closing date. Additionally, for purpose of the foregoing rights, “Fair Market Value” means the volume weighted average price per share of the Company’s common stock for the twenty consecutive trading days immediately preceding the notice date. During the Exercise Period, each of the TA Members shall be prohibited from engaging in certain transactions in the Company’s stock, as more particularly set forth in the TA MIPA. The fair value of the Put Option was determined using the Black Scholes Pricing Model and will be marked to market at each reporting date.
In
accordance with the acquisition method of accounting, the purchase price has been assigned to the assets acquired, and the liabilities
assumed, based on their estimated fair value at the acquisition date. In connection with the acquisition, the Company incurred $
| Consideration paid | ||||
| Cash | $ | |||
| Common stock | ||||
| Fair value of TA Milestone Payment | ||||
| Fair value of derivative liability | ||||
| Total consideration | $ | |||
| Assets acquired and liabilities assumed | ||||
| Cash and cash equivalents | $ | |||
| Intangibles | ||||
| Goodwill | ||||
| Total assets | $ | |||
| Deferred merchant bookings | ||||
| Total liabilities | $ | |||
| Total net assets | $ |
The fair value of the working capital items, including cash and deferred merchant bookings, approximates their respective carrying values at the date on which control was obtained.
The fair value of the acquired tradename, acquired supplier agreements, and acquired travel agency agreements were determined using the relief from royalty method, with or without method and multi-period excess earnings method, respectively, which utilized projected financial information. The goodwill recognized in the acquisition primarily represents synergies with the existing operations of the Company, and the value of yet-to-be-acquired/developed customers, technology, assembled workforce, and any other assets.
NOTE 7 – GoUSA TV Asset Purchase
On February 2, 2026, NextTrip, Inc. entered into an Asset Purchase Agreement with The Corporation for Travel Promotion, doing business as “Brand USA” (“Seller”), pursuant to which the Company agreed to purchase select content, brand rights, and distribution assets (collectively, the “Assets”) of GoUSA TV, a travel streaming platform originally launched to showcase destinations across the United States. GoUSA TV historically reached an estimated 200+ million viewers globally across connected TV, mobile applications, and digital platforms, including Samsung TV Plus, LG Channels, Titan OS, and TCL International.
| 17 |
The
aggregate consideration under the Purchase Agreement is $
The GoUSA TV assets are being integrated into JOURNY.tv within the Media segment. GoUSA TV content serves as a U.S.-focused demand-generation layer within NextTrip’s broader media-to-commerce ecosystem
NOTE 8 – Intangible Assets
Intangible assets as of May 31, 2026, and February 28, 2026 consisted of the following:
| May 31, 2026 | February 28, 2026 | |||||||
| Software Development | $ | $ | ||||||
| Software Licenses | ||||||||
| Trademark | ||||||||
| FSA Travel, LLC Tradename | ||||||||
| FSA Software Agreements | ||||||||
| TA Pipeline, LLC Tradename | ||||||||
| TA Pipeline, LLC Supplier and Agency Agreements | ||||||||
| JOURNY.tv – Trade Name | ||||||||
| JOURNY.tv Distribution Agreements | ||||||||
| Journy.tv Production Costs | ||||||||
| GoUSA Content Episodes | ||||||||
| GoUSA Content IMAX | ||||||||
| GoUSA Distribution Agreements | ||||||||
| GoUSA Assembled Workforce | ||||||||
| Total | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net of amortization | $ | $ | ||||||
Amortization
expense for the three months ended May 31, 2026, and 2025 was $
During
the three months ended May 31, 2026, and 2025, the Company did
The estimated aggregate amortization expense for each of the succeeding years ending February 28 is as follows:
| 2027 (Remaining) | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| $ |
| 18 |
NOTE 9 – Goodwill
Reverse Acquisition of Sigma Additive Solutions, Inc.
As discussed in Note 1 – Business Description and Going Concern, the legal acquisition of NTH by the Company on December 29, 2023 was determined to be a reverse acquisition, with NTH as the accounting acquirer, using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method of accounting, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of consummation of the transaction.
Pursuant
to ASC 350-20, the Company assigned its goodwill to reporting units and is required to test each reporting unit’s goodwill for
impairment at least on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than
not reduce the fair value of a reporting unit below its carrying amount. The goodwill resulting from the reverse acquisition is primarily
attributable to NTH’s objective to obtain access to public markets to provide funding wherewithal to fund business growth. NTH’s
benefit in paying for these synergies in the reverse acquisition transaction was to avoid the time and expense of organizing and executing
an Initial Public Offering transaction. In the reverse acquisition, $
Acquisition of FSA Travel, LLC
As
of May 31, 2026, goodwill of $
Acquisition of TA Pipeline LLC
As
of May 31, 2026, goodwill of $
NOTE 10 – Notes Payable
On
September 26, 2025, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
On
October 17, 2025, the Company sold two short-term promissory notes, each for a principal balance of $
On
October 24, 2025, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $
| 19 |
On
March 24, 2026, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of
$
On May 26, 2026, the Company entered into an agreement to sell a short-term promissory note to 1800 Diagonal
Lending LLC in the aggregate principal amount of $
NOTE 11 – Long-Term Debt
As
part of the acquisition of FSA on April 9, 2025, the Company assumed an SBA loan originally issued to FSA on December 4, 2020, with an
initial principal amount of $
In
accordance with ASC 805 – Business Combinations, the assumed loan was recognized at its acquisition-date fair value of $
The loan is measured at amortized cost subsequent to the acquisition date, and interest expense is recognized using the effective interest method based on the fair value of the liability at the acquisition date. The following table summarizes the loan terms as of the acquisition date:
| Description | Amount | |||
| Principal amount | $ | |||
| Fair value at acquisition date | $ | |||
| Remaining term | ||||
| Monthly payment | $ | |||
| Effective interest rate | % | |||
As
of May 31, 2026, the balance of the loan was $
NOTE 12 - Related Party Transactions
Monaco Investment Partners, II Line of Credit
On
May 6, 2025, the Company entered into a Line of Credit Agreement (the “MIP Line of Credit”) with Monaco Investment Partners
II, LP (“MIP”) providing the Company with a $
As
of May 31, 2026 the maximum amount of $
On July 13, 2026, subsequent to the balance sheet date and prior to the issuance of these condensed financial statements, the Company and Monaco Investment Partners II executed an amendment extending the maturity date by one year, to May 31, 2028. The amendment is not cancelable by the lender and does not expire within one year of the balance sheet date. All other significant terms of the arrangement, including the interest rate, remained unchanged.
| 20 |
Because the Company has extended the obligation on a long-term basis prior to the issuance of these financial statements, and the extended maturity is beyond one year from the balance sheet date, the outstanding balance has been classified as a long-term liability as of May 31, 2026 in accordance with ASC 470-10-45-14.
Donald P. Monaco Insurance Trust Short-Term Promissory Note
On
March 25, 2026, the Company sold a short-term promissory note (the “Note”) to the Donald P. Monaco Insurance Trust in the
principal amount of $
As
of May 31, 2026 the outstanding principal balance was $
Between
June 3, 2026 and June 30, 2026, the parties entered into further amendments to increase the principal balance to $
Compensation Deferral
The
Company’s Chief Executive Officer, William Kerby, at his election, has agreed to defer $
Equity Investments
On
April 15, 2026, Andy Kaplan, a director of the Company, through KC Global Media Asia LLC (“KCGM”), purchased shares
of Series A Preferred Stock at $ per share, resulting in gross proceeds to the Company of $
On
May 8, 2026, Mr. Kaplan, through KCGM, purchased shares of Common Stock at $ per share, resulting in gross proceeds to the
Company of $
NextTrip Privilege, Inc. Licensing and Services Agreement
On December 12, 2025, the Company entered into a Licensing and Servicing Agreement with NextTrip Privilege, Inc. (“Privilege”), pursuant to which the Company has agreed to provide to Privilege: (a) personnel to support their operations; (b) a license to use the name “NextTrip” as their corporate and business name; (c) a license to use our software in connection with their private-label internet website; and (d) continuing advances to fund their operations until they raise sufficient capital.
In consideration for the foregoing, Privilege has agreed to pay the Company:
| ● | a
| |
| ● | the cost of the annual membership fee for each year of Privilege membership provided to investors; | |
| ● | reimbursement of all incremental expenses paid by the Company on behalf of Privilege, related to an investor’s membership; | |
| ● | any revenue received by Privilege from investor bookings on our platform; | |
| ● | repayment
of all advances previously made or made in the future, with advances being interest-free until February 28, 2026 and thereafter accruing
interest at the rate of | |
| ● | beginning
March 1, 2026, an Administrative Services Fee of $ |
| 21 |
On
April 15, 2026, the Company and NextTrip Privilege, Inc. entered into Amendment No. 1 to the Licensing and Services Agreement, which
deferred the commencement date of the $
As
of May 31, 2026, the Company had advanced a total of $
Stock Option Agreement
On
December 2, 2025, NextTrip Group, LLC (“NextTrip Group”), the holder of
Common Officers and Directors
Three of the Company’s executive officers and directors concurrently serve as executive officers and directors of Privilege: Donald P. Monaco serves as President, Chairman and a director of Privilege; William Kerby serves as Vice President and a director of Privilege; and Frank Orzechowski serves as Chief Financial Officer and a director of Privilege.
NOTE 13 - Commitments and Contingencies
The Company is involved, from time to time, in litigation, other legal claims and proceedings involving matters associated with or incidental to our business, including, among other things, matters involving breach of contract claims, intellectual property, employment issues, and other related claims and vendor matters. The Company believes that the resolution of currently pending matters would not, individually or in the aggregate, have a material adverse effect on our financial condition or results of operations. However, assessment of the current litigation or other legal claims could change considering the discovery of facts not presently known to the Company or by judges, juries or other finders of fact, which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or claims.
TA Pipeline Put Option and Contingently Redeemable Shares
In
connection with the acquisition of TA Pipeline LLC on August 6, 2025 (see Note 6), the Company issued
restricted shares of common stock (the “TA Closing Shares”)
to the former TA Members, valued at $
| 22 |
On
February 24, 2026, the former TA Members submitted an exercise notice with respect to all of their TA Closing Shares. The Company
believes the former TA Members are in breach of their obligations under the TA MIPA and has declined to honor the exercise of the
Put Option. The parties are in discussions to resolve the dispute; however, the outcome of such discussions is uncertain. The
Company believes it has meritorious defenses and intends to vigorously defend against any claims, as well as to assert any
counterclaims relating to the TA Members’ alleged breach. The maximum aggregate cash exposure under the Put Option, if
ultimately determined adverse to the Company, would be approximately $
For additional information regarding the TA Pipeline acquisition, the Put Option, and the TA Milestone Payment, refer to Note 2 (Summary of Significant Accounting Policies), Note 6 (Acquisition of TA Pipeline, LLC), and Note 14 (Stockholders’ Equity).
Option to Purchase NextTrip Privilege Class B Common Stock
On
December 2, 2025, the Company was granted an option by NextTrip Group, LLC to acquire up to shares of Class B common stock
of NextTrip Privilege, Inc. at $ per share, or an aggregate exercise price of $
JOURNY.tv Licensing and Royalty Payment Obligation
In
connection with the JOURNY.tv Asset Acquisition (see Note 5), the Company is obligated to make license fee payments to Ovation LLC totaling
$
GoUSA TV Minimum Royalty Payment Obligation
In
connection with the GoUSA TV Asset Purchase (see Note 7), the Company agreed, for the three-year period beginning on the closing date
of February 2, 2026, to pay Brand USA a royalty equal to
Helena Global Investment Opportunities 1 Ltd. Private Placement
Liquidated
damages of $
| 23 |
NOTE 14 - Stockholders’ Equity
Mezzanine Equity
TA Pipeline LLC Acquisition
In connection with the acquisition of TA Pipeline LLC on August 6, 2025, the Company issued TA Closing Shares. Although the shares are legally common stock, they are classified as mezzanine (temporary) equity on the consolidated balance sheet due to contingent redemption rights resulting from derivative liability provisions that could require cash or share settlement outside the Company’s control.
Accordingly, these shares are presented outside of permanent stockholders’ equity and below total liabilities. The Company will continue to classify the shares as mezzanine equity until such time as the redemption provisions lapse or are removed, or until settlement occurs.
The
carrying amount of instruments recorded within mezzanine equity are not adjusted below initial measurement. The TA Acquisition Shares
were initially recorded at $ per share, which was the closing prices of our stock on the acquisition date. The Put Option has an
exercise price of $
For further information regarding the TA Closing Shares and TA Acquisition shares, refer to Notes 2 and 6.
Helena Global Investment Opportunities 1 Ltd. Private Placement
On
May 6, 2026, the Company entered into a Securities Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. (“Helena”)
pursuant to which the Company issued shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”),
consisting of shares issued in exchange for cash proceeds of $
Classification of Series B Convertible Preferred Stock
The Company classifies its Series B Convertible Preferred Stock as mezzanine equity because the redemption obligation, while at a fixed date, is not unconditional from the Company’s perspective. Helena retains the right to convert the Series B Preferred Stock into Common Stock at any time prior to the mandatory redemption date and the right to elect a one-time extension of the mandatory redemption date. As a result, whether redemption occurs (in cash) or is settled through conversion (in shares), and the timing of any such redemption, is outside the Company’s sole control. As such, the Series B Convertible Preferred Stock is presented between liabilities and stockholders’ equity on the balance sheet.
Initial Measurement
Proceeds from the issuance of the Series B Convertible Preferred Stock and detachable Investor Warrant are allocated to the two freestanding instruments using the relative fair value method pursuant to ASC 470-20-25-2. The portion of proceeds allocated to the Investor Warrant is credited to additional paid-in capital. The portion of proceeds allocated to the Series B Convertible Preferred Stock, net of debt issuance costs and original issue discount associated with issuance fee shares issued for no consideration, represents the initial carrying value of the mezzanine preferred.
Subsequent Measurement
The mezzanine carrying value of the Series B Convertible Preferred Stock is accreted to its redemption value over the period from issuance to the mandatory redemption date using the effective interest method. Accretion and stated dividends accrued on the Series B Convertible Preferred Stock are recognized as charges to retained earnings (deemed dividends to the holder) and reduce net income available to common shareholders for purposes of earnings per share calculations pursuant to ASC 260-10-S99. Accreted amounts and dividends are not recognized as interest expense in the income statement.
| 24 |
Common Stock
The Company has shares of common stock authorized for issuance pursuant to its amended and restated articles of incorporation, as amended (“Charter”). At May 31, 2026 and February 28, 2026, there were (excluding mezzanine shares classified outside of permanent equity) and shares of common stock, par value $ per share, issued and outstanding, respectively. All shares of common stock have equal voting rights, are fully-paid and non-assessable, and are entitled to one vote per share.
During the first quarter of 2025, the Company issued shares of common stock in connection with various investor relations consulting contracts, shares of common stock to the holders of shares of the Company’s Series L and Series M Preferred stock as dividends, shares of common stock to Ovation as partial consideration pursuant to the April 1, 2025 JOURNY.tv Asset Purchase Agreement; shares of common stock to ITA as a finder’s fee related to the FSA acquisition; shares of common stock pursuant to a consulting contract related to the development and launch of a dedicated beauty and wellness FAST channel; and shares of common stock to the members of NTG pursuant to the Exchange Agreement, constituting Contingent Shares issuable to the members of NTG upon the achievement of all business milestones.
During the first quarter of 2026, the Company issued shares of common stock in connection with various investor relations consulting contracts, shares of common stock in connection with strategic marketing and business development contracts, shares of common stock as consideration pursuant to third party contractor services, shares of common stock to a vendor as settlement for outstanding invoices, shares of common stock issued as stock-based compensation to an employee, shares issued as commission payments to travel agents, and shares issued to investors in private placements.
Preferred Stock
Under our Charter, our board of directors has the authority, without further action by stockholders, to designate one or more series of preferred stock and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be preferential to or greater than the rights of the common stock.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock.
The Company is authorized to issue shares of preferred stock, par value $ per share.
An aggregate of (excluding mezzanine shares of Series B Preferred classified outside of permanent equity) and shares of preferred stock were issued and outstanding at May 31, 2026 and February 28, 2026, respectively, as further discussed below.
Series A Convertible Preferred Stock
On February 9, 2026, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series A Preferred Stock, par value $ per share (the “Series A Preferred”).
The terms and conditions set forth in the Series A Certificate of Designation are summarized below:
Ranking. The Series A Preferred rank pari passu to the Company’s common stock.
Dividends. Holders of Series A Preferred will be entitled to dividends, on an as-converted basis, equal to dividends actually paid, if any, on shares of Company common stock.
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Voting. Except as provided by the Company’s Charter or as otherwise required by the Nevada Revised Statutes, holders of Series A Preferred are entitled to vote with the holders of outstanding shares of Company common stock, voting together as a single class, with respect to all matters presented to the Company’s stockholders for their action or consideration. In any such vote, each holder is entitled to a number of votes equal to the number of shares of common stock into which the Series A Preferred held by such holder is convertible. The Company may not, without the consent of holders of a majority of the outstanding shares of Series A Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred or alter or amend the Series A Certificate of Designation, (ii) amend its Charter or other charter documents in any manner that adversely affects any rights of the holders of the Series A Preferred, or (iii) enter into any agreement with respect to the foregoing.
Conversion. On the third business day after the date that the Company’s stockholders approve the conversion of Series A Preferred into shares of Common Stock in accordance with the listing rules of Nasdaq, each outstanding share of Series A Preferred shall automatically be converted into one share of Company common stock (subject to adjustment under certain limited circumstances) (the “Series A Conversion Ratio”), subject to beneficial ownership limitations.
Liquidation. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series A Preferred will be entitled to participate, on an as-converted-to-common stock basis calculated based on the Series A Conversion Ratio, with holders of Company common stock in any distribution of assets of the Company to holders of the Company’s common stock.
At May 31, 2026, shares of the issued Series A Preferred were outstanding, which if converted as of May 31, 2026, would have resulted in the issuance of shares of common stock.
Series B Convertible Preferred Stock
On May 6, 2026 the Company filed a Certificate of Designation of Series B Convertible Preferred Stock (the “Series B Certificate of Designation”) with the Secretary of State of the State of Nevada, designating shares of the Company’s preferred stock as Series B Preferred Stock, par value $ per share (the “Series B Preferred”).
The terms and conditions set forth in the Series B Certificate of Designation are summarized below:
Ranking. The Series B Preferred Shares rank pari passu to the Company’s existing preferred shares and prior to the holders of the Company’s Common Stock and any other series of capital stock ranking junior to the Preferred Shares.
Dividends.
Holders of Series B Preferred Shares will be entitled to dividends equal to
Voting. Except as otherwise provided herein or as required by the Nevada Revised Statutes, the Series B Preferred Stock shall have no voting rights. However, without the affirmative vote of the holders of a majority of the then outstanding Series B Preferred Shares, the Company may not (i) alter or change adversely the powers, preferences or rights given to Series B Preferred Shares or alter or amend the Certificate of Designation in any manner that adversely affects any rights of the holders of the Series B Preferred Shares, (ii) issue further Series B Preferred Shares or increase or decrease the number of authorized shares of Series B Preferred Shares, or (iii) enter into any agreement with respect to the foregoing.
Conversion.
At the option of the Holder, each outstanding share of Series B Preferred Shares may be converted at an initial conversion price of $
Liquidation.
In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, holders of Series B Preferred
Shares will be entitled to receive in preference to the holders of Common Stock and any class of capital stock junior to the Series B
Preferred Shares an amount per share equal to the greater of (i)
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Redemption.
The Company has the right to redeem all or any portion of the Series B Preferred Shares at a price per share equal to the Stated Value
plus all accrued and unpaid dividends (the “Redemption Price”). On August 30, 2026, the Company is obligated to redeem all
outstanding Series B Preferred Shares at the Redemption Price. The Holder may elect to extend the redemption period to December 31, 2026
by providing written notice at least five (5) Trading Days prior to August 30, 2026. Upon the occurrence of an Event of Default, the
Company shall mandatorily redeem all outstanding Series B Preferred Shares at the Mandatory Default Amount, which equals
Events
of Default under the Series B Certificate of Designation include, among others: (a) failure to pay the Mandatory Default Amount with
5 business days of when due; (b) breach of representations, warranties or covenants; (c) bankruptcy or insolvency proceedings; (d) delisting
or suspension from the Principal Market or receipt of deficiency notices from Nasdaq or failing to meet Nasdaq listing standards; (e)
entry of unsatisfied judgments in excess of $
On
May 6, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Helena Global Investment
Opportunities 1 Ltd. (the “Purchaser”), pursuant to which the Company issued and sold (a) an aggregate of restricted
shares of newly designated Series B Convertible Preferred Stock, par value $, of the Company (the “Series B Preferred Shares”)
plus additional Series B Preferred Shares as an issuance fee; and (b) a five-year warrant (the “Warrant”) to purchase
The obligations of the Company under the transaction documents are secured by a pledge of shares of Common Stock (the “Pledged Shares”) owned by the Company’s Chief Executive Officer, William Kerby, pursuant to a Guarantee and Pledge Agreement (the “Pledge Agreement”). The Pledge Agreement provides a limited recourse guarantee, with recourse solely to the Pleated Shares and not to any other assets of Mr. Kerby.
Pursuant
to the Purchase Agreement,
Also, in connection with any “at the market” offerings conducted by the Company during the 180-day period following the Closing Date, the Purchaser has the right to require the Company to apply an amount equal to 25% of the net proceeds to redeem the Series B Preferred Shares at the Redemption Price.
At May 31, 2026, shares of the issued Series B Preferred were outstanding and classified as mezzanine shares outside of permanent equity, which if converted as of May 31, 2026, would have resulted in the issuance of shares of common stock.
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Series E Convertible Preferred Stock
Under
the Certificate of Designations of the Series E Preferred Stock, shares of the Company’s Series E Preferred have an initial stated
value of $ per share (the “Series E Stated Value”). Dividends at the initial rate of
At May 31, 2026, shares of Series E Preferred were outstanding, which if converted as of May 31, 2026, including the make-whole dividends, would have resulted in the issuance of shares of common stock.
Stock Options
On December 28, 2023, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved the adoption of the NextTrip 2023 Equity Incentive Plan (the “2023 Plan”). shares of common stock have been reserved for issuance under the 2023 Plan, and as of May 31, 2026, shares are available for future issuance.
The Company’s 2013 Equity Incentive Plan expired on March 15, 2023. As such, there were no shares of common stock reserved for future issuance thereunder as of May 31, 2026.
On March 26, 2025, under the terms of the 2013 Equity Incentive Plan, all outstanding options terminated upon the change in control effected by the issuance of Contingent Shares pursuant to the Exchange Agreement entered into in connection with the NextTrip Acquisition.
During the three months ended May 31, 2026 and 2025, the Company granted and issued stock options to purchase an aggregate of and shares of common stock, respectively, under the 2023 Plan.
The Company generally grants stock options to employees, consultants, and directors at exercise prices equal to the fair market value of the Company’s common stock on the grant date, but not less than 100% of the fair market value. Stock options are typically granted throughout the year and generally vest over a period from one to three years of service and expire five years from the grant date, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the vesting period for each stock option award.
Total stock-based compensation expense included in the statements of operations for the three months ended May 31, 2026 and 2025 was $() related to a common share issuance and $ related to stock options, respectively.
| 2026 | 2025 | |||||||
| Dividend yield | % | % | ||||||
| Risk-free interest rate | % | %- | % | |||||
| Expected volatility | % | %- | % | |||||
| Expected life (in years) | - | |||||||
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| Options | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Life (Yrs.) | Aggregate Intrinsic Value ($) | |||||||||||||
| Options outstanding at February 28, 2025 | ||||||||||||||||
| Granted | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | ( | ) | - | |||||||||||||
| Options outstanding at February 28, 2026 | ||||||||||||||||
| Granted | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | - | |||||||||||||||
| Options outstanding May 31, 2026 | ||||||||||||||||
| Options expected to vest in the future as of May 31, 2026 | ||||||||||||||||
| Options exercisable at May 31, 2026 | ||||||||||||||||
| Options vested, exercisable, and options expected to vest at May 31, 2026 | ||||||||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of our common stock for those awards that have an exercise price below the market price of our common stock. At May 31, 2026, no options had an exercise price below the $ closing price of our common stock as reported on The Nasdaq Capital Market.
At May 31, 2026, there was $ unrecognized stock-based compensation expense related to unvested stock options.
Stock Appreciation Rights
The purposes of the 2020 Stock Appreciation Rights Plan (the “2020 SAR Plan”) are to: (i) enable the Company to attract and retain the types of employees, consultants, and directors (collectively, “Service Providers”) who will contribute to the Company’s long-range success; (ii) provide incentives that align the interests of Service Providers with those of the stockholders of the Company; and (iii) promote the success of the Company’s business. The 2020 SAR Plan provides for incentive awards that are only in the form of stock appreciation rights payable in cash (“SARs”). No shares of common stock are reserved or will be issued pursuant to the 2020 SAR Plan.
SARs may be granted to any Service Provider. A SAR is the right to receive an amount equal to the Spread with respect to a share of the Company’s common stock (a “Share”) upon the exercise of the SAR. The “Spread” is the difference between the exercise price per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of exercise of the SAR. The exercise price per share will not be less than 100% of the fair market value of a Share on the date of grant of the SAR. The administrator of the 2020 SAR Plan will have the authority to, among other things, prescribe the terms and conditions of each SAR, including, without limitation, the exercise price and vesting provisions, and to specify the provisions of the SAR Agreement relating to such grant.
On March 26, 2025, under the terms of the 2020 SAR Plan, all outstanding unvested SARs became immediately vested and exercisable upon the change in control effected by the issuance of Contingent Shares pursuant to the Exchange Agreement entered into in connection with the NextTrip Acquisition.
The Company did not grant any SARs during the three months ended May 31, 2026 or May 31, 2025.
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The Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the vesting period for each SAR award. The SARs are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation,” and any changes in fair value are reflected in the Statement of Operations as of the applicable reporting date.
| SARs | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Life (Yrs.) | Aggregate Intrinsic Value ($) | |||||||||||||
| SARs outstanding at February 28, 2025 | ||||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | ( | ) | - | |||||||||||||
| SARs outstanding at February 28, 2026 | ||||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited or cancelled | - | |||||||||||||||
| SARs outstanding May 31, 2026 | ||||||||||||||||
| SARs expected to vest in the future as of May 31, 2026 | - | |||||||||||||||
| SARs exercisable at May 31, 2026 | ||||||||||||||||
| SARs vested, exercisable, and SARs expected to vest at May 31, 2026 | ||||||||||||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of our common stock for those awards that have an exercise price below the market price of our common stock. At May 31, 2026, no SARs had an exercise price below the $ closing price of our common stock as reported on The Nasdaq Capital Market.
At May 31, 2026, there was no unrecognized stock-based compensation expense related to unvested SARs.
Warrants
Assumptions:
| 2026 | 2025 | |||||||
| Dividend yield | % | % | ||||||
| Risk-free interest rate | %- | % | %- | % | ||||
| Expected volatility | %- | % | %- | % | ||||
| Expected life (in years) | - | - | ||||||
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Warrant activity for the three months ended May 31, 2026 and the year ended February 28, 2026 was as follows:
| Warrants | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Life (Yrs.) | ||||||||||
| Warrants outstanding at February 28, 2025 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | - | |||||||||
| Forfeited or cancelled | ( | ) | - | |||||||||
| Warrants outstanding at February 28, 2026 | ||||||||||||
| Granted | ||||||||||||
| Exercised | - | |||||||||||
| Forfeited or cancelled | - | |||||||||||
| Warrants outstanding at May 31, 2026 | ||||||||||||
NOTE 15 – Segment Information
ASC
Topic 280, Segment Reporting, establishes standards for reporting information about
In response to acquisitions and expanded business activities, during the third quarter of fiscal year 2026, our CODM requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, we have updated our reporting and beginning in the third quarter of fiscal year 2026, we report our financial performance based on our new segments: “Travel” and “Media”. Our Travel segment provides travelers with a full range of travel services through its NXT2.0 booking engine, which offers extensive inventory and a platform for curating personalized experiences and efficient trip planning and booking. In addition, Five Star Alliance provides luxury and cruise offerings, and TA Pipeline provides a group-travel agency platform for conferences, conventions, weddings, and affinity groups. Our Media segment consists of JOURNY.tv, (including GoUSA TV) a Connected TV Channel broadcast as Free Ad Supported Streaming TV (“FAST”) and Advertising Video on Demand (“AVOD”) that specializes in travel, adventure, and culture-focused content, and Travel Magazine, an online travel magazine that provides articles, tips, guides and inspiration for travelers. We leverage our media brands—TravelMagazine.com and JOURNY.tv—as strategic tools to generate travel bookings by integrating content, marketing, and booking technology as well as to generate advertising revenues for third-party content. Additional information regarding our operating segments can be found in the overview section of Item 2 of this Quarterly Report, entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Prior periods disclosed below have been recast to conform to these newly identified segments.
Our primary operating metric is Operating Income (Loss). Operating Income (Loss) for our Travel and Media segments includes direct expenses of the segments as well as allocations of certain expenses, primarily salaries and benefits, third party contractors, sales and marketing, and technology We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate shared corporate expenses such as accounting, human resources, certain information technology and legal to our reportable segments. We include these expenses in Corporate. Our allocation methodology will be periodically evaluated and may change as the segments evolve.
Our CODM currently uses Operating Income (Loss) to assess performance in the monthly financial review process. Because our segments have been newly formed, the financial reporting framework continues to be under development and in the future will be used to assess performance and allocate resources for the segments in the annual budget and quarterly forecasting processes. The CODM will consider budget-to-actual variances on a monthly basis using Operating Income (Loss) when making decisions about allocating capital and personnel to the segments. The CODM also anticipates using Operating Income (Loss) to assess the performance and compensation of certain employees.
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Corporate includes unallocated corporate functions including finance and administration, technology, and corporate development. In addition, we record amortization of intangible assets and any related impairment, investor relations, stock-based compensation expense, legal and audit, directors’ compensation and other items excluded from segment operating performance in Corporate. Such amounts are detailed in our segment reconciliation below.
The following tables present our segment information for the three months ended May 31, 2026. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation and amortization is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision maker.
All of our revenues are attributed to customers located in the United States; therefore, no revenues are reported from foreign geographic areas.
| Three Months Ended May 31, 2026 | ||||||||||||||||
| Media | Travel | Corporate | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue (exclusive of depreciation and amortization, shown separately below) | ( | ) | ( | ) | ||||||||||||
| Gross profit (loss) | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Stock based compensation | ( | ) | ( | ) | ||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Professional service fees | ||||||||||||||||
| Technology | ||||||||||||||||
| Organization costs | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Provision for credit losses | ||||||||||||||||
| Other expenses | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other Income (Expense) | ||||||||||||||||
| Other Income (Expense) | ( | ) | ||||||||||||||
| Gain (Loss) on extinguishment of liability | ||||||||||||||||
| Gain on derivative liability | ||||||||||||||||
| Interest income (expense), net | ( | ) | ||||||||||||||
| Total Other Income (Expense) | ( | ) | ||||||||||||||
| Net loss before provision for income taxes | ( | ) | ||||||||||||||
| Provision for income taxes | ||||||||||||||||
| Net income loss before share of net income (loss) in equity method investee | ( | ) | ||||||||||||||
| Share of net income (loss) of equity method investee | ||||||||||||||||
| Net loss | ( | ) | ||||||||||||||
| Preferred dividends | ( | ) | ||||||||||||||
| Net Loss Applicable to Common Stockholders | $ | ( | ) | |||||||||||||
| 32 |
| Three Months Ended May 31, 2025 | ||||||||||||||||
| Media | Travel | Corporate | Total | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue (exclusive of depreciation and amortization, shown separately below) | ( | ) | ( | ) | ||||||||||||
| Gross profit (loss) | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Stock based compensation | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Professional service fees | ||||||||||||||||
| Technology | ||||||||||||||||
| Organization costs | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Other expenses | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other Income (Expense) | ||||||||||||||||
| Other Income (Expense) | ||||||||||||||||
| Gain (Loss) on extinguishment of liability | ( | ) | ||||||||||||||
| Gain on derivative liability | ||||||||||||||||
| Interest income (expense), net | ( | ) | ||||||||||||||
| Total Other Income (Expense) | ||||||||||||||||
| Net loss before provision for income taxes | ( | ) | ||||||||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss before share of net income (loss) in equity method investee | ( | ) | ||||||||||||||
| Share of net income (loss) of equity method investee | ( | ) | ||||||||||||||
| Net loss | ( | ) | ||||||||||||||
| Preferred dividends | ( | ) | ||||||||||||||
| Net Income (Loss) Applicable to Common Stockholders | $ | ( | ) | |||||||||||||
There were no intersegment revenues during the three months ended May 31, 2026 or May 31, 2025; all revenues presented are from external customers. The significant expense categories presented above for each reportable segment reconcile in full to each segment’s measure of Operating Income (Loss); accordingly, there were no other segment items (as described in ASC 280-10-50-26A) for the three months ended May 31, 2026 or May 31, 2025. The “Other expenses” line presented within each segment comprises insurance, bank and payment-processing fees, and other individually immaterial operating costs.
NOTE 16 - Subsequent Events
The Company’s management has evaluated subsequent events after the balance sheet dated as of May 31, 2026 through July 15, 2026, the date of this report.
Yada Commerce Inc. Acquisition
Stock Purchase Agreement
On
June 10, 2026 (the “Effective Date”), NextTrip, Inc. (the “Company”) entered into a Stock Purchase Agreement
(the “Purchase Agreement”) with Yada Commerce Inc (“Yada”) and High Class Holdings LLC and Carbon Capital Corp,
the shareholders of Yada (collectively, the “Founding Shareholders”) pursuant to which, subject to the terms and conditions
set forth in the Purchase Agreement, the Company purchased from the Founding Shareholders
| 33 |
The aggregate consideration under the Purchase Agreement is restricted shares of the Company (the “Company Shares”). The Company granted to the Founding Shareholders piggyback registration rights subject to cut backs required under Rule 415 and at the request of investors, placement agents and underwriters. The Purchase Agreement contains customary representations and indemnification provisions. The Purchase Agreement also contains provisions regarding the post-closing governance of Yada including a provision requiring the parties to vote their shares of Yada to elect a five member board of directors, two of whom will be designated by the Founding Shareholders, two of whom will be designated by the Company, with the fifth member to be appointed by the board of directors. The Purchase Agreement also provides for a first right of refusal in favor of the Company regarding any future sale by the Founding Shareholders of their shares in Yada.
Cooperation and Earnout Agreement.
Concurrently
with the entering into of the Purchase Agreement, the Company entered into a Cooperation and Earnout Agreement (the “Earnout Agreement”)
with Yada regarding the post-closing operations of Yada, the role of the Company, and the compensation arrangement for the Founding Shareholders.
The Earnout Agreement has a three-year term from the Effective Date (the “Term”). Under the Earnout Agreement, the Parties
acknowledge that, notwithstanding the Company’s controlling interest in Yada, the Founding Shareholders will retain full operational
control over Yada’s day-to-day business affairs, subject to the oversight of Yada’s board of directors, and the rights, duties
and obligations of Yada’s officers, directors and shareholders under Yada’s organizational documents and applicable law.
The Earnout Agreement grants to the Company certain roles including serving as Yada’s exclusive preferred travel provider, the
first right of refusal to match any bona fide third-party proposal with respect to travel service offered through Yada channels, the
processing by the Company of travel bookings generated through Yada channels, the exclusive right to offer travel gift cards through
Yada channels, and the exclusive booking rights for music artist promotional events. The Earnout Agreement also sets forth the sharing
of Net Profits between the Company and the Founding Shareholders from activities enumerated in the Earnout Agreement. The Earnout Agreement
further provides as inducement compensation for the Founding Shareholders the establishment of an earnout pool consisting of an aggregate
of restricted shares of the Company’s common stock and warrants to purchase up to
Related Party Promissory Note
The
Donald P. Monaco Insurance Trust (the “Trust”) promissory note has been amended to increase the principal amount and extend
the maturity date, as follows: On June 3, 2026 the Company and the Trust (the “Parties”) entered into the Sixth Amendment
extending the maturity date to
Related Party Line of Credit
On
July 13, 2026, the Company and Monaco Investment Partners II, executed an amendment to the Company’s line of credit extending the
maturity date from
Related Party Equity Investment
On
June 18, 2026, David Jiang, a director, purchased shares of common stock in a private placement at $ per share resulting in
gross proceeds of $
Short Term Promissory Notes
On
June 9, 2026, we sold a short-term promissory note to a private investor for $
On
July 1, 2026, the Company entered into a short-term loan agreement with OnDeck for a principal amount of $
Warrant Exercise
On
June 16, 2026, a private investor exercised a warrant to purchase
TA Pipeline Arbitration
As described in Note 13 - Commitments and Contingencies, as of May 31, 2026, the Company and the former TA Members were engaged in discussions to resolve the dispute concerning the Put Option. The parties most recent communication occurred on June 17, 2026, and did not result in a resolution. On July 14, 2026, subsequent to the end of the period covered by this report, the Company received a Demand for Arbitration filed with the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules by Luis Barberi, Mitch Toren, and Ashish Tembe, the former TA Members (collectively, the “Claimants”), naming the Company as respondent.
In the accompanying Statement of Claim, the Claimants
assert a single count for breach of contract, alleging that the Company failed to honor its obligation under Section 7.5(a)(i) of the
TA MIPA to
The Company believes the former TA Members are in
breach of their obligations under the TA MIPA, believes it has meritorious defenses, and intends to vigorously defend against the claims
and to assert any available counterclaims relating to the TA Members' alleged breach. The arbitration remains in its earliest stage, and
the Company is unable at this time to predict its outcome or to reasonably estimate the amount or range of any possible loss.
| 34 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-looking statements
This Quarterly Report on Form 10-Q for the quarter ended May 31, 2026 (this “Quarterly Report”) contains “Forward-Looking Statements.” All statements other than statements of historical fact are “Forward-Looking Statements” including but not limited to, statements regarding our expectations about development and commercialization of our technology, any projections of revenues or statements regarding our anticipated revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All Forward-Looking Statements included in this Quarterly Report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any Forward-Looking Statement. In some cases, Forward-Looking Statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the Forward-Looking Statements contained herein are reasonable, there can be no assurance that such expectations or any of the Forward-Looking Statements will prove to be correct, and actual results could differ materially from those projected or assumed in the Forward-Looking Statements. Future financial condition and results of operations, as well as any Forward-Looking Statements are subject to inherent risks and uncertainties, including factors referred to in our press releases and reports filed with the Securities and Exchange Commission (the “SEC”). All subsequent Forward-Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional factors that may have a direct bearing on our operating results are described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended February 28, 2026 and elsewhere in this Quarterly Report.
Corporation Information
Sigma Additive Solutions, Inc. (“Sigma”), the legal acquiror of NextTrip, was initially incorporated as Messidor Limited in Nevada on December 23, 1985, and changed its name to Framewaves Inc. in 2001. On September 27, 2010, the name was changed to Sigma Labs, Inc. On May 17, 2022, Sigma Labs, Inc. began doing business as Sigma Additive Solutions, and on August 9, 2022, changed its name to Sigma Additive Solutions, Inc.
On March 11, 2024, Sigma filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation, as amended to date, with the Secretary of State of the State of Nevada, pursuant to which, effective as of 12:01 a.m. Pacific time on March 13, 2024, among other things, Sigma’s corporate name was changed from Sigma Additive Solutions, Inc. to “NextTrip, Inc.”
Our principal executive offices are located at 1560 Sawgrass Corporate Parkway, Suite 400, Sunrise Florida 33323, and our telephone number is (954) 526-9688. Our website address is www.nexttrip.com. The Company’s annual reports, quarterly reports, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other information related to the Company, are available, free of charge, on our website. The Company’s website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Quarterly Report.
The Company provides travel technology solutions with sales originating in the United States, with a primary emphasis on hotels, air, and all-inclusive travel packages. Our proprietary booking engine, branded as NextTrip 2.0, provides travel distributors access to a sizeable inventory.
Reverse Acquisition
On October 12, 2023, the Company (then known as Sigma) entered into a Share Exchange Agreement (the “Exchange Agreement”) with NextTrip Holdings, Inc. (“NTH”), NextTrip Group, LLC (“NTG”), and William Kerby (the “NTH Representative”), pursuant to which the Company acquired NTH (the “NextTrip Acquisition”) in exchange for shares of our common stock, which we refer to as the Exchange Shares. The NextTrip Acquisition was consummated on December 29, 2023. As a result, NTH became a wholly-owned subsidiary of the Company.
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Upon the closing of the NextTrip Acquisition, the shareholders of NTG (collectively, the “NTG Sellers”), were issued a number of Exchange Shares equal to 19.99%, or 156,007 shares, of our issued and outstanding shares of common stock immediately prior to the closing. Under the Exchange Agreement, the NTG Sellers were entitled to receive additional shares of our common stock, referred to as the Contingent Shares, subject to NTH’s achievement of future business milestones (the “Milestone Events”) specified in the Exchange Agreement as follows:
| Milestone Event | Date Earned | Contingent Shares | Status as of the date of this Report | |||
| Launch of NTH’s leisure travel booking platform by either (i) achieving $1,000,000 in cumulative sales under its historical “phase 1” business, or (ii) commencement of its marketing program under its enhanced “phase 2” business. | As of a date six months after the closing date | 1,450,000 Contingent Shares | Achieved. Marketing program under “phase 2” has commenced. | |||
| Launch of NTH’s group travel booking platform and signing of at least five (5) entities to use the Groups Platform. | As of a date nine months from the closing date (or earlier date six months after the closing date) | 1,450,000 Contingent Shares | Achieved. Five groups have been contracted to use the Groups Platform. | |||
| Launch of NTH’s Travel Agent Platform and signing up of at least 100 travel agents to the platform (which calculation includes individual agents of an agency that signs up on behalf of multiple agents). | As of a date 12 months from the closing date (or earlier date six months after the closing date) | 1,450,000 Contingent Shares | Achieved. The company has signed up more than 175 travel agents to its Travel Agent Platform. | |||
| Commercial launch of PayDlay technology in the NXT2.0 system. | As of a date 15 months after the closing date (or earlier date six months after the closing date) | 1,650,000 Contingent Shares, less the Exchange Shares issued at the closing of the Acquisition | Achieved. PayDlay has been commercially launched. |
The Contingent Shares, together with the shares of our common stock issued at the closing, was not to exceed 6,000,000 shares of our common stock, or approximately 90.2% of our issued and outstanding shares of common stock immediately prior to closing.
The Exchange Agreement provided that William Kerby, the Chief Executive Officer and co-founder of NTH, was appointed as Chief Executive Officer of the Company and Donald P. Monaco was appointed as a director of the Company as of the closing of the NextTrip Acquisition. Additionally, pursuant to the Exchange Agreement, the NTH Representative (Mr. Kerby) shall be entitled to designate a replacement for one additional director of the Company upon achievement of each of the milestones under the Exchange Agreement (the “Board Appointment Rights”).
In connection with the NextTrip Acquisition, the Company and Nasdaq determined that the issuance of Contingent Shares upon achievement of any one of the Milestone Events would result in a change in control of the Company under Nasdaq Listing Rule 5635(a). Pursuant to Nasdaq Listing Rule 5110(a), the Company was required to submit an initial listing application with Nasdaq and to obtain Nasdaq approval of the initial listing application prior to the issuance of the Contingent Shares.
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On March 25, 2025, the Company received a letter from Nasdaq notifying the Company that it had approved the Company’s initial listing application in connection with the issuance of the Contingent Shares. On March 26, 2025, the Company issued the NTG Sellers an aggregate of 4,393,993 of the Contingent Shares in satisfaction of the Company’s obligations under the Exchange Agreement. As a result of Nasdaq’s approval of our initial listing application, the issuance of the Contingent Shares was completed in compliance with Nasdaq Listing Rule 5110(a) and the Company’s shares of common stock continue to trade on the Nasdaq Capital Market under the symbol “NTRP.”
On May 5, 2025, as a result of the achievement of the fourth and final business milestone, the remaining 1,450,000 Contingent Shares were issued to the NTG Sellers. No additional shares are issuable pursuant to the Exchange Agreement as of the date of this Quarterly Report.
In July 2025, Mr. Kerby, in his capacity as the NTH Representative, informed the Company of his election to exercise the Board Appointment Rights pursuant to the Exchange Agreement and designated Stephen Kircher, Jimmy Byrd, Carmen Diges and David Jiang (collectively, the “NTH Appointees”) as the individuals to replace the continuing legacy Sigma directors. On July 14, 2025, the Company’s Board of Directors appointed the NTH Appointees as directors of the Company, in each case effective July 28, 2025, at which time Salvatore Battinelli, Jacob Brunsberg, Dennis Duitch and Kent Summers resigned as directors of the Company. Stephen Kircher shall serve as a Class I director, with his initial term expiring at the Company’s 2028 Annual Meeting of Stockholders; Jimmy Byrd shall serve as a Class II director, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders; and Ms. Diges and Mr. Jiang shall each serve as a Class III director, with their initial terms expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of NTH Appointees will serve as a director for the balance of their respective initial terms, and until his or her successor is elected and qualified, subject to his or her earlier death, resignation or removal.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying financial statements. Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. By their nature, changes in these assumptions and estimates could significantly affect our financial position or results of operations. Significant accounting estimates that may materially change in the near future are revenue recognition, impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts and inventory obsolescence. Such critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 of the Notes to Financial Statements included in this Quarterly Report. However, we do not believe that there are any alternative methods of accounting for our operations that would have a material effect on our financial statements.
The critical accounting policies and estimates addressed below reflect our most significant judgements and estimates used in the preparation of our financial statements.
Revenue Recognition – The Company recognizes revenue in accordance with ASC 606 which involves identifying the contracts with customers, identifying performance obligations in the contracts, determining transaction price, allocating transaction price to the performance obligation and recognizing revenue when the performance obligation is satisfied.
The Company recognizes revenue when the customer has purchased the product, the occurrence of the earlier of date of travel or the date of cancellation has expired, as satisfaction of the performance obligation, the sales price is fixed or determinable and collectability is reasonably assured. Revenue for customer travel packages purchased directly from the Company are recorded gross (the amount paid to the Company by the customer is shown as revenue and the cost of providing the respective travel package is recorded to cost of revenues).
The Company generates revenues from sales directly to customers as well as through other distribution channels of tours and activities at destinations throughout the world.
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The Company controls the specified travel product before it is transferred to the customer and is therefore a principal, based on but not limited to, the following:
| ● | The Company is primarily responsible for fulfilling the promise to provide such travel product. | |
| ● | The Company has inventory risk before the specified travel product has been transferred to a customer or after transfer of control to a customer. | |
| ● | The Company has discretion in establishing the price for the specified travel product. |
Payments for tours or activities received in advance of services being rendered are recorded as deferred revenue and recognized as revenue at the earlier of the date of travel or the last date of cancellation (i.e., the customer’s refund privileges lapse).
Investments in Equity Securities without Readily Determinable Fair Value
In accordance with ASC 321-10-35-2, the Company holds certain investments in equity securities in which the Company does not have significant influence or control, and for which fair value is not readily determinable. These investments are primarily accounted for at cost, less any impairment. The carrying amount is periodically evaluated for impairment, and if necessary, an impairment loss is recognized in the statement of operations. These investments are not adjusted for unrealized gains or losses unless an impairment is identified.
For investments in non-public entities where fair value is not determinable, the Company does not adjust the carrying value for changes in fair value, except for impairment losses. The fair value of these investments is disclosed when it is practicable to determine.
Fair Value Measurements
We measure certain financial instruments at fair value, which requires management to make estimates and assumptions. For most items such as cash, receivables, and payables, fair value is straightforward because of their short-term nature. However, two obligations we assumed in connection with our acquisition of TA Pipeline LLC involve more judgment and could have a meaningful effect on our results.
| ● | Put Option – The restricted shares issued in the acquisition give the sellers the right, under certain conditions, to require us to either repurchase the shares, issue additional shares, or make a cash payment if our stock trades below a set price. We record this obligation as a liability, and its value changes with movements in our stock price and related assumptions. | |
| ● | TA Milestone Payment – We also agreed to make an additional payment to the sellers based on TA Pipeline revenue during the first year after closing. This payment, which will be made in both cash and stock, is also recorded as a liability and depends on our projections for TA Pipeline’s performance. |
Because the fair value of these obligations depends on factors outside of our control, such as our stock price and TA Pipeline’s revenues, the amounts we record may change from period to period. For example, a change in our assumed stock price volatility could change the value of the Put Option liability, while a similar change in projected revenues could affect the Milestone Payment liability.
Stock Based Compensation
We grant stock options, restricted stock, and other equity-based awards to employees, executives, directors, and consultants. The fair value of these awards is measured on the grant date and recognized as compensation expense over the vesting period.
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Determining the fair value of stock options requires the use of valuation models, such as the Black-Scholes model, which involve assumptions about stock price volatility, expected term of the option, risk-free interest rates, and dividend yields. These assumptions are based on historical data and market conditions but involve judgment about future trends.
Because changes in these assumptions can significantly affect the estimated fair value, our stock-based compensation expense could vary materially from period to period. For instance, higher assumed volatility or longer expected option lives generally increase the fair value of options, leading to higher compensation expense.
Goodwill and Intangible Assets
We record goodwill and intangible assets in connection with business acquisitions. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Intangible assets primarily include trade names, customer and supplier relationships, and technology.
We review goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. This process requires management to make assumptions and estimates which involve significant judgment. Changes in assumptions could materially affect whether an impairment is recognized and the amount of any impairment charge.
Software Development Costs
The Company capitalizes internal software development costs subsequent to establishing technological feasibility of a software application in accordance with guidelines established by “ASC 985-20-25” Accounting for the Costs of Software to Be Sold, Leased, or Otherwise Marketed, requiring certain software development costs to be capitalized upon the establishment of technological feasibility. The establishment of technological feasibility and the ongoing assessment of the recoverability of these costs require considerable judgment by management with respect to certain external factors such as anticipated future revenue, estimated economic life, and changes in software and hardware technologies. Amortization of the capitalized software development costs begins when the product is available for general release to customers. Capitalized costs are amortized based on the straight-line method over the remaining estimated economic life of the product.
Impairment of Intangible Assets
In accordance with ASC 350-30-65 “Goodwill and Other Intangible Assets”, the Company assesses the impairment of identifiable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important, which could trigger an impairment review include the following:
1. Significant underperformance compared to historical or projected future operating results;
2. Significant changes in the manner or use of the acquired assets or the strategy for the overall business; and
3. Significant negative industry or economic trends.
When the Company determines that the carrying value of an intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent to the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. Intangible assets that have finite useful lives are amortized over their useful lives.
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Segments
Segment reporting is considered a critical accounting policy because it requires management to exercise judgment in identifying operating segments, determining how those segments are aggregated into reportable segments, and determining the information reviewed by our Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and assessing performance. Our determination of reportable segments is based on multiple factors, including the nature of the products and services offered, the types of customers served, the economic characteristics of each business, and the manner in which financial information is reviewed by our CODM. Our CODM is our Chief Executive Officer.
In response to acquisitions and expanded business activities, during the third quarter of fiscal year 2026, our CODM requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. This change was driven primarily by acquisitions completed during fiscal year 2026, including FSA and TA Pipeline, which expanded our travel-related operations, and JOURNY.tv, which expanded our media operations. As a result of these changes, we updated our internal reporting structure and, beginning in the third quarter of fiscal year 2026, we began reporting our financial performance based on two reportable segments: Travel and Media.
Our Travel segment provides travelers with a full range of travel services through our NXT2.0 booking engine, which offers extensive inventory and a platform for curating personalized experiences and efficient trip planning and booking. In addition, Five Star Alliance provides luxury and cruise offerings, and TA Pipeline provides a group-travel agency platform for conferences, conventions, weddings, and affinity groups. Our Media segment consists of JOURNY.tv, (our owned global travel media network, into which we are integrating the GoUSA TV content library and distribution assets acquired from Brand USA in February 2026), our joint venture with KC Global Media for international expansion across India, Southeast Asia, Africa, and Australia/New Zealand, and Travel Magazine, our editorial travel content platform. We expect combined JOURNY.tv and GoUSA TV assets to support media distribution reaching approximately 250 million viewers globally in 2026 across FAST, OTT, connected TV, mobile, and digital platforms.
Our primary measure of segment performance is Operating Income (Loss). Operating Income (Loss) for the Travel and Media segments includes direct expenses attributable to each segment, as well as allocations of certain expenses, primarily salaries and benefits, third-party contractors, sales and marketing, and technology costs. These allocations are based primarily on transaction volumes and other usage-based metrics. Shared corporate expenses, including accounting, human resources, certain information technology costs, legal, audit, investor relations, directors’ compensation, stock-based compensation expense, amortization of intangible assets, and corporate development costs, are not allocated to the reportable segments and are included within Corporate.
Because the Travel and Media segments were newly formed during fiscal year 2026, the financial reporting framework supporting segment reporting continues to evolve. While the CODM currently uses Operating Income (Loss) in the monthly financial review process to assess segment performance, he is continuing to review and refine the nature, level of detail, and frequency of the financial information provided in order to determine how it will ultimately be used in decision-making, including resource allocation, budgeting, forecasting, and performance evaluation. As the segments mature, the metrics reviewed by the CODM, the cost allocation methodologies applied, and the presentation of segment information may change to better reflect how the business is managed.
The CODM does not regularly review asset information by segment, and as a result, depreciation and amortization are excluded from the segment performance measure. Accordingly, we do not report segment assets, as such information would not be meaningful.
The change in reportable segments did not result from a change in accounting principle, but rather reflects a change in internal reporting and management approach following fiscal year 2026 acquisitions and expanded business activities. Segment information for prior periods has been recast to conform to the current presentation to provide consistency and comparability across periods. Any future refinements to segment reporting will reflect changes in management’s internal reporting and decision-making processes rather than changes in accounting principles. When applicable, we will disclose such changes and recast prior-period segment information as necessary to maintain comparability.
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Business Overview
NextTrip, Inc. (the “Company,” “NextTrip,” “we,” “us” and “our”) is a technology-forward travel and media company operating at the intersection of premium content and travel commerce. We believe the travel industry is undergoing a structural shift toward video-led discovery, personalized planning, and seamless booking experiences, where consumers increasingly move from inspiration to transaction within connected digital environments. Our strategy is designed to capture this shift.
NextTrip combines premium travel content, global audience reach, proprietary booking technology, and concierge-supported travel services into a unified ecosystem designed to guide consumers across the full travel journey—from inspiration and discovery to planning, booking, and servicing.
We market our travel services through several core brands, including NextTrip Vacations (direct-to-consumer leisure travel), Five Star Alliance (luxury hotel and cruise bookings), and TA Pipeline (groups travel). Our specialty platforms include PayDlay (a deferred payment booking option), the Groups Platform (for destination weddings, conferences, and conventions), and the Travel Agent Platform. Our Media segment properties—JOURNY.tv, GoUSA TV content and platforms, the KCGM Joint Venture across Southeast Asia, and Travel Magazine—provide destination content designed to drive high-intention traffic into our Travel segment booking platforms and generate independent advertising revenue. Through our recent acquisition of YADA Commerce, Inc., we gained a strategic creator-commerce platform capable of driving audience acquisition, creator engagement, entertainment experiences, and travel transactions across the broader NextTrip ecosystem.
Because we are at an early stage of commercial development and have only nominal revenues to date, our ability to implement our business plan depends on our ability to successfully expand our supplier relationships, attract customers, and secure adequate capital to fund marketing and future product development. There can be no assurance that we will be able to do so.
Current Scale and Going Concern
We are in the early stages of commercial operations.
Due to uncertainties regarding our ability to meet our current and future operating and capital expenses, there is substantial doubt about our ability to continue as a going concern for 12 months from the date of filing of this Quarterly Report and the report of our registered independent public accounting firm filed with our Annual Report on Form 10-K for the fiscal year ended February 28, 2026 contains a going concern qualification.
We expect to continue to incur net losses and negative cash flows from operations for the foreseeable future as we invest in technology enhancements, supplier relationships, and marketing initiatives. Throughout this report, whenever we discuss our operational achievements, ecosystem, or growth plans, you should consider that we presently have nominal revenues, limited operating history, minimal brand awareness, and will require significant additional capital to execute our business model.
Our Integrated Content-to-Commerce Platform
Our platform is designed to connect four core elements into a seamless pathway from discovery to confirmed booking:
Content and Inspiration – travel programming, editorial content, and long and short-form destination storytelling across our Media segment platforms, including JOURNY.tv, GoUSA TV content and platforms, the KCGM Joint Venture across Southeast Asia, and Travel Magazine.
Discovery and Planning – editorial content, Agentic AI-powered personalization tools, and search capabilities designed to guide travel decisions and connect audience engagement with booking intent, including through Travel Magazine Pro in our Travel segment.
Booking and Commerce – direct transaction capabilities through the NXT2.0 platform and affiliated booking platforms within our Travel segment, supporting a broad range of travel categories including leisure, luxury, cruise, group, and business travel.
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Service and Support – concierge and call center infrastructure supporting higher-value travel experiences and complex booking needs across our Travel segment.
This integrated approach is intended to create a seamless pathway we describe as “Watch. Scan. Book. Go.”, enabling consumers to move from inspiration through our Media segment directly to booking discounted packages mirroring the watched Travel segment. We believe this model reduces customer acquisition costs over time by leveraging owned media audiences while also generating independent advertising revenue from our Media segment.
Business Segments
We operate and report our business in two segments: (1) Travel and (2) Media.
Travel Segment
Our Travel segment encompasses our travel booking and commerce operations. This segment includes our proprietary NXT2.0 booking platform and all booking-oriented brands and products: NextTrip Vacations, Five Star Alliance, TA Pipeline, JournyGO, and Travel Magazine Pro™. The Travel segment generates revenue primarily through commissions, markups, and service fees on travel bookings, as well as advisor-driven commissions and attribution-based fees through Travel Magazine Pro™.
NXT2.0 – Core Booking Platform
At the core of our Travel segment is our proprietary NXT2.0 travel booking engine, which powers several websites, including nexttrip.com and fivestaralliance.com, as well as our Groups Platform and Travel Agent Platform. NXT2.0 supports direct-to-consumer and advisor-assisted booking across leisure, luxury, cruise, group, and business travel verticals. We serve both leisure and business travelers by offering access to travel blogs, videos, and concierge assistance to aid in planning travel, coupled with our booking platform for the direct purchase of flights, hotels, vacation homes, cruises, tours, and other travel products.
Five Star Alliance
Five Star Alliance is a premier luxury travel agency and a wholly owned subsidiary of the Company, acquired in April 2025. Founded in 2004, Five Star Alliance offers a curated collection of over 5,000 five-star and luxury hotels and resorts worldwide, with an industry-leading 4.9-star Trustpilot rating and over 400,000 monthly site visitors. Five Star Alliance offers personalized recommendations, high-end travel solutions, a proprietary booking engine, and established relationships with premium travel providers, and generates revenue primarily through commission-based bookings. See “Recent Developments - Acquisition of Five Star Alliance.”
TA Pipeline
TA Pipeline is a premier group travel and Meetings, Incentives, Conferences and Exhibitions (“MICE”) platform and a wholly owned subsidiary of the Company, acquired in August 2025. TA Pipeline has established itself as a leading group-travel agency platform with deep expertise in delivering end-to-end solutions for conferences, conventions, destination weddings, and affinity groups, often servicing groups ranging from 50 to 5,000 travelers. TA Pipeline has strong relationships with suppliers, planners, and affinity partners, and its integration into the NXT2.0 ecosystem and PayDlay financing tool is designed to enhance conversion rates and drive incremental travel bookings. See “Recent Developments - Acquisition of TA Pipeline.”
JournyGO
On
March 31, 2026, the Company launched JournyGO, our next-generation, agentic AI-powered consumer engagement and booking ecosystem. JournyGO
is the commercial activation layer of our content-to-commerce strategy and is reported within our Travel segment because its primary
function is to convert viewer engagement into confirmed travel bookings. JournyGO integrates immersive travel video (delivered through
our Media segment’s JOURNY.tv platform), our proprietary Promethean interactive overlay technology, dynamic travel packaging, and
agentic AI assistance, supported by live Travel Specialists when needed to seamlessly move viewers from inspiration to confirmed travel
bookings.
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The Promethean platform, licensed on a perpetual basis, enables contextual advertisements and booking calls-to-action to be embedded directly within streaming video content, allowing users to initiate a booking without leaving the viewing experience. JournyGO also includes JOURNY mobile applications for iPhone and Android, as well as dedicated connected TV apps. Using artificial intelligence, JournyGO is designed to personalize content recommendations, convert editorial content into video, and enable users to create custom travel channels aligned with their interests. See “Recent Developments - Launch of JournyGO.”
Travel Magazine Pro
Travel Magazine Pro (TravelMagazine.com) is our premium digital editorial, advisor engagement, and travel commerce platform within our Travel segment, launched as the next evolution of Travel Magazine 2.0. Travel Magazine Pro is designed to operate as a strategic mid-funnel bridge between the inspirational audience reach generated by our Media segment and the transaction capabilities of our Travel segment, helping convert travel interest into measurable booking activity across the NextTrip ecosystem.
The platform features destination-focused editorial content, curated travel guides, hotel and resort recommendations, cruise and experiential travel highlights, travel planning resources, and influencer-driven content intended to engage high-intent leisure travelers during the consideration and planning phase of the customer journey. Integrated booking pathways and affiliate links connect users to our travel platforms and supplier partners, creating a seamless path from inspiration to search and transaction.
Travel Magazine Pro is also being developed to support travel advisors and distribution partners through content-sharing tools, lead attribution capabilities, and white-label promotional solutions that enable advisors to market premium travel offerings while participating in resulting booking revenues. In addition, the platform is expected to include “My Bucket List,” a social travel planning feature that will allow travelers to build, organize, and share personalized travel wish lists enhanced by booking functionality, destination insights, and curated recommendations.
Revenue generated through Travel Magazine Pro is expected to include affiliate booking commissions, advertising sales, sponsored placements, premium editorial partnerships, lead generation fees, and advisor-related transaction revenue. See “Recent Developments—Launch of Travel Magazine Pro.”
Media Segment
Our Media segment encompasses our content creation, audience development, media distribution, and advertising monetization operations. This segment includes JOURNY.tv (incorporating GoUSA TV content) and Travel Magazine, our editorial travel content platform. The Media segment generates revenue primarily through advertising, sponsorships, branded content, and destination marketing programs. In addition to direct monetization, the Media segment functions as a demand-generation engine for the Travel segment, enabling NextTrip to engage travel audiences at scale and reduce reliance on third-party marketing channels.
JOURNY.tv (Including GoUSA TV Integration)
JOURNY.tv is our owned global travel media network, providing premium travel programming across free ad-supported streaming television (“FAST”), over-the-top (“OTT”), connected TV, and digital platforms. JOURNY.tv had an estimated audience of approximately 17 million travel enthusiasts at the time of acquisition by NextTrip, and operates through key platform partnerships, including Samsung TV Plus and Plex.
In February 2026, we acquired original content, brand rights, and distribution assets of GoUSA TV from Brand USA (The Corporation for Travel Promotion). GoUSA TV is a travel streaming channel, reaching an estimated 200+ million viewers globally across connected TV, mobile, and digital platforms, including Samsung TV Plus, LG Channels, Plex, Titan OS, and TCL International. Rather than operating GoUSA TV as a standalone channel, we are integrating its U.S.-focused travel content library and distribution infrastructure into JOURNY.tv to enhance scale, content depth, and advertiser relevance. Combined, JOURNY.tv and GoUSA TV assets are expected to support media distribution reaching approximately 250 million viewers globally in 2026 across FAST, OTT, connected TV, mobile, and digital platforms. See “Recent Developments—GoUSA TV Asset Purchase.”
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In July 2025, we entered into a joint venture with KC Global Media to accelerate the international expansion of JOURNY.tv into India, Southeast Asia, Africa and Australia/New Zealand, targeting new regional distribution partnerships and advertising opportunities. See “Recent Developments—KC Global Media Joint Venture.”
Travel Magazine
Travel Magazine (TravelMagazine.com) is our editorial travel content platform within our Media segment. It is an online travel publication that provides articles, guides, destination inspiration, hotel and restaurant recommendations, and general travel advice. Its audience includes both casual vacationers and more seasoned travelers seeking ideas and information for their next trip. Travel Magazine functions primarily as a content and audience platform within our Media segment, generating revenue through advertising and sponsored content, while also directing engaged readers to our owned booking channels, including NextTrip and Five Star Alliance, as well as to select third-party partners through affiliate relationships.
The media team benefits from a range of strategic partners driving advertising revenue potential, including Leap Media Group (over 35 years of TV advertising and media planning experience), Travel Spike (programmatic and direct travel advertising sales), Magnite (programmatic advertising), and Blue Fysh Holdings (digital out-of-home media solutions across North America). See “Recent Developments—Blue Fysh Share Exchange.”
NXT2.0 – Our Integrated Travel Booking Platform
Development of the Platform
Prior to the COVID-19 pandemic, NextTrip (then known as Monaker Group) operated a travel business focused on the sale of vacation rentals and alternative lodging rentals (“ALRs”) through its proprietary booking engine (NXT1.0). In June 2022, NextTrip acquired the Bookit.com booking engine, including its customer database, destination content, source code, and approximately 250 third-party travel supplier Application Programming Interface (“API”) relationships. The Bookit.com platform had previously powered a well-established online leisure travel agent generating over $400 million in annual sales as recently as 2019 (pre-pandemic). We launched the NXT2.0 platform in May 2023 and have since scaled to over four million hotel properties, vacation rental homes, and cruise products globally.
Travel Products and Services
Inventory and product offerings on our platform consist chiefly of: (1) direct contracts, which are negotiated directly with the travel provider and generally generate higher gross margins; and (2) third-party API content, which is lower margin but significantly broadens inventory and supports the integration of specialty products, leading to cross-selling and additional revenue opportunities.
Our Direct Contract Strategy
Our initial focus was to negotiate direct connectivity and fixed base pricing contracts with hotels and travel suppliers and to integrate those products into NXT2.0. This allows us to set our own pricing and control our margins for leisure and vacation travel products and negotiate and run co-op marketing. This flexibility affords us the opportunity to run competitive specials and adjust pricing within our marketplace.
Our Inventory Expansion and API Strategy
To supplement our higher-margin direct inventory and support our specialty platforms, we have integrated a series of third-party API relationships into NXT2.0. Major suppliers include Expedia (worldwide hotel product), Nuitée (hotel and vacation rental homes), Global Distribution Systems (luxury hotels and activities), and Signature Travel Network via Five Star Alliance (all major cruise lines). These established suppliers provide significant additional content and product depth in our booking engine, giving NextTrip comprehensive global leisure travel inventory coverage.
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Core Product Offerings
NextTrip’s Travel segment offerings span leisure, luxury, cruise, group, and business travel. Key product offerings include:
NextTrip Vacations – Our core leisure platform, powered by NXT2.0, delivering seamless booking and customizable travel options across airlines, hotels, cruises, ground activities, and more.
Five Star Alliance – A luxury travel platform providing access to over 5,000 five-star hotels and resorts worldwide with personalized concierge services and an industry-leading 4.9-star Trustpilot rating.
NextTrip Cruise – A fully integrated cruise booking engine providing access to over 10,000 sailings and 35 cruise partners. Travelers benefit from exclusive pricing, concierge service, and bundled packages including transfers, pre- and post-cruise stays, and expert travel support, launched March 27, 2025.
TA Pipeline – A premier group travel and MICE platform supporting destination weddings, conferences, conventions, and affinity group travel for groups ranging from 50 to 5,000 travelers.
Travel Magazine Pro– Our premium digital editorial, advisor engagement, and travel commerce platform designed for travel agencies, advisors, and agents to compete online and offline.
Groups Platform – A solution for complex travel needs such as conferences, conventions, and destination weddings, with several group bookings completed within the first 60 days of launch from leads generated by Five Star Alliance.
NXT2.0 Platform Features
Existing Features
Our marketplace at nexttrip.com offers tools for browsing and comparing flights, hotels, tours, cruises, and activities. We allow travelers to defer payments on select vacation packages with our proprietary PayDlay program, which allows travelers to purchase travel with a small deposit and make subsequent payments between purchase and the week before travel, with no interest charged. Registered NextTrip travelers can manage bookings, receive updates on special offers, and subscribe to newsletters. Security is a priority, with rigorous content screening and Payment Card Industry (“PCI”) compliance to safeguard customer information.
NXT2.0 equips travelers with a seamlessly integrated planning and booking ecosystem. Within a personalized profile, users can explore a curated library of videos and editorial content tailored to their interests, earmark preferred destinations and activities, and engage a dedicated concierge team for travel planning support. Travelers may transact digitally through the platform’s booking engine or speak directly with a call-center specialist, all while utilizing proprietary payment tools such as PayDlay.
Technology and Infrastructure
Our websites are hosted using cloud services distributed globally across multiple regions, designed to manage increases in traffic through scalable computing power without requiring software changes. Our cloud services provide scalable and redundant Internet connectivity as well as redundant power and cooling. We use industry-standard security methods to ensure the integrity of our networks and protection of confidential data. Access to NextTrip’s networks and the servers and databases on which confidential data is stored is protected by industry-standard firewall and encryption technology. Physical access to our servers and related equipment is secured by limiting access to the data center to operations personnel only.
Promethean Interactive Platform
Promethean is our proprietary interactive video overlay platform, licensed on a perpetual basis, which drives advertising revenue and facilitates the connection between our Media and Travel segments. We are integrating this platform into JournyGO’s video content with interactive overlays that allow users to initiate travel bookings directly from streaming content through contextual calls-to-action without interrupting the viewing experience. Promethean is the key technology enabling our “Watch. Scan. Book. Go.” ecosystem, providing the link through which JOURNY.tv viewers in our Media segment can transact within our Travel segment in real time.
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Revenue Strategy and Development of an Integrated Travel and Media Ecosystem
NextTrip’s revenue strategy is built on two complementary and mutually reinforcing revenue streams generated across our two operating segments.
Travel Segment Revenue
We generate Travel segment revenue through commissions, markups, and service fees on travel bookings across hotels, vacation rentals, cruises, packages, and related travel services. Product sales are generally structured either: (1) as a set commission on the sale of a travel product whereby the supplier or wholesaler controls the pricing (as is the case with the majority of Five Star Alliance products), or (2) through a direct, negotiated contract between the Company and the product supplier (as is the case with the majority of NextTrip’s products), which allows us to set our own retail pricing. Commission-based travel products are generally lower margin than directly negotiated travel products. Our strategy emphasizes higher-value travel segments, including luxury travel, cruise, and group travel, which we believe offer higher transaction values, repeat business opportunities, and enhanced service economics. Travel Magazine Pro also contributes Travel segment revenue through affiliate commissions and sponsored booking content.
Media Segment Revenue
We generate Media segment revenue through advertising, sponsorships, branded content, and destination marketing programs across JOURNY.tv and Travel Magazine. As the number of viewers and users grows, it drives the advertising rates the Company can charge third parties to promote travel products and services to our audience. Beyond generating direct advertising dollars, our growing audience provides additional opportunities for NextTrip to promote its own Travel segment products to highly targeted viewers, reducing our dependence on external marketing channels.
The deployment of JournyGO and the Promethean interactive overlay platform is expected to further enhance both segments by converting Media segment viewership into Travel segment bookings, while simultaneously supporting higher advertising CPMs through demonstrated audience action rates.
Development of Integrated Revenue Model
NextTrip is in the early stages of development and roll out of its comprehensive two-segment model. While the products introduced to date are now functional and generating nominal revenues, those revenue streams are currently small and variable relative to established travel industry leaders. Our ability to capitalize on our platforms is constrained by limited funding for marketing programs. The timeline to complete planned programs is dependent upon our ability to raise capital; however, we believe that most programs can be delivered within 180 days of obtaining such necessary funding. Once fully integrated, we believe the model will deliver accelerating revenue growth as our content-to-commerce strategy targets underserved areas in the travel sector—such as PayDlay, Groups bookings, and the Travel Agent Platform—not well serviced by the major travel industry leaders.
Recent Developments
Acquisition of a Controlling Interest in YADA
On
June 10, 2026, the Company entered into a Stock Purchase Agreement with YADA Commerce Inc. (“YADA”) pursuant to which the
Company acquired a controlling interest in YADA, a fully licensed TikTok Partner Agency and creator-commerce platform focused on influencer
engagement, audience development, digital commerce, and music artist promotional events.
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Highlights of the Transaction:
| ● | Adds a Fully Licensed TikTok Partner Agency providing access to creator recruitment, audience development, affiliate commerce, livestream commerce, and creator monetization capabilities. | |
| ● | Expands NextTrip’s Audience Acquisition Engine through access to thousands of creators and billions of aggregate followers across social media platforms. | |
| ● | Launches NextTrip’s Destination Entertainment & Creator Commerce with 4 destination music events already committed featuring exclusive artist partnerships, fan experiences, concert travel programs, and creator-led commerce initiatives. | |
| ● | Creates New Revenue Opportunities for our media platform to drive additional advertising, sponsorships, travel bookings, experiential travel, memberships, gift cards, loyalty programs, and creator commerce. |
Through YADA, the Company gains a strategic creator-commerce platform capable of driving audience acquisition, creator engagement, entertainment experiences, and travel transactions across the broader NextTrip ecosystem. NextTrip believes the acquisition represents significantly more than a traditional social media marketing initiative and includes access to pre-booked group travel programs involving several artists for exclusive concert experiences for super fans in unique destinations and premium resort venues.
Under the agreement, NextTrip will serve as the travel fulfillment partner for YADA’s music artist promotional events and related fan experiences. The Company expects to leverage its group travel capabilities through TA Pipeline, luxury travel offerings through Five Star Alliance, concierge travel services, and proprietary travel inventory available through the NXT2.0 platform to support future event-related travel programs.
Launch of JournyGO – Agentic AI-Powered Watch. Scan. Book. Go. Ecosystem
On March 31, 2026, the Company launched JournyGO, its next-generation agentic AI-powered consumer engagement and booking ecosystem within the Travel segment. JournyGO integrates immersive travel video (delivered through the Company’s JOURNY.tv Media segment platform), the Company’s proprietary Promethean interactive overlay technology, dynamic travel packaging, and agentic AI assistance—supported by live Travel Specialists when needed—to seamlessly move viewers from inspiration to confirmed travel bookings. JournyGO represents the full commercial activation of our “Watch. Scan. Book. Go.” content-to-commerce strategy and is designed to drive Travel segment bookings and Media segment advertising revenue directly from streaming content engagement.
Launch of Travel Magazine Pro™
The Company launched Travel Magazine Pro™, a category-defining platform within the Travel segment that reimagines how travel advisors inspire, engage, and monetize demand in a world increasingly driven by digital discovery and real-time transactions. Travel Magazine Pro™ equips travel advisors with a vertically integrated platform combining premium media, intelligent CRM, and embedded commerce, enabling advisors to distribute editorial-quality travel content—destinations, itineraries, and curated journeys—fully embedded with live, bookable inventory.
The platform is powered by NextTrip’s connected trip technology and enhanced through licensed technology integrations with Worldia, enabling dynamic packaging of flights, hotels, and experiences into flexible, real-time itineraries. Travel Magazine Pro™ incorporates a robust attribution framework that tracks and links advisor-driven engagement to completed bookings across the customer journey, including delayed or repeat bookings within defined attribution windows, enabling advisors to earn fees and commissions on transactions attributable to their content and client interactions. Key platform capabilities include seamless in-content booking, dynamic customizable travel packages, competitive pricing, high-margin commission structures across all travel components including air, and AI-driven personalization. Travel Magazine Pro™ is now available to travel advisors nationwide.
Launch of JOURNY App on Apple iOS
The
Company launched the JOURNY App on Apple iOS, expanding direct consumer access to JOURNY.tv travel programming on mobile devices. The
iOS app extends the JournyGO ecosystem to mobile viewers and supports the Company’s Media segment strategy of reaching travel audiences
across connected TV, mobile, and digital platforms.
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GoUSA TV Asset Purchase
On February 2, 2026, NextTrip, Inc. entered into an Asset Purchase Agreement with The Corporation for Travel Promotion, doing business as “Brand USA” (“Seller”), pursuant to which the Company agreed to purchase select content, brand rights, and distribution assets (collectively, the “Assets”) of GoUSA TV, a travel streaming platform originally launched to showcase destinations across the United States. GoUSA TV historically reached an estimated 200+ million viewers globally across connected TV, mobile applications, and digital platforms, including Samsung TV Plus, LG Channels, Titan OS, and TCL International.
The aggregate consideration under the Purchase Agreement is $350,000 in cash plus restricted shares of the Company with a value of $350,000 based on the weighted average price of the shares for the twenty consecutive trading days ending on the trading day two trading days prior to closing. In addition, the Company will pay to Seller a royalty equal to 15% of the Company’s gross advertising revenue from the exploitation of the acquired content rights during the three-year period beginning on the closing date. The Company has also agreed, for a three-year period beginning on closing, to pay a royalty of 1% for every $100,000 in destination booking revenue directly attributed to the acquired content, with a minimum quarterly payment of $30,000.
The GoUSA TV assets are being integrated into JOURNY.tv within the Media segment. GoUSA TV content serves as a U.S.-focused demand-generation layer within NextTrip’s broader media-to-commerce ecosystem.
KC Global Media Joint Venture
In July 2025, NextTrip entered into a joint venture with KC Global Media, a leading Asian entertainment network founded by former Sony executives, to accelerate the international expansion of the JOURNY.tv Media segment platform into India, Southeast Asia, and Australia/New Zealand. This initiative is intended to support regional distribution partnerships, advertising monetization opportunities, and localized content strategies, while significantly expanding NextTrip’s global audience reach and strengthening top-of-funnel travel demand generation for the Travel segment.
Acquisition of TA Pipeline
On August 6, 2025, the Company entered into a Membership Interest Purchase Agreement (the “TA MIPA”) with TA Pipeline LLC (“TA”) and the members of TA (the “TA Members”), pursuant to which the Company purchased all of the issued and outstanding membership interests of TA (the “TA Acquisition”). The TA Acquisition closed on August 6, 2025, resulting in TA becoming a wholly-owned subsidiary of the Company operating within the Travel segment.
Pursuant to the TA MIPA, as consideration for the TA Acquisition, the Company (i) paid the TA Members an aggregate of $443,168 in cash and (ii) issued an aggregate of 96,774 restricted shares of Company common stock valued at $300,000, based on a price per share of $3.10. In addition, the Company shall make an earnout payment equal to five percent (5%) of the net revenues generated by TA during the 12-month period after the closing date, up to a maximum of $200,000, payable 50% in cash and 50% in restricted shares of Company common stock at $3.10 per share.
In addition, in the event that the fair market value of the Company’s common stock is less than $3.10 per share during the applicable exercise period, each TA Member shall have a limited, one-time option to (i) require the Company to repurchase all or a portion of their TA acquisition shares at $3.10, (ii) require the Company to issue additional shares to make the aggregate value equal to the original aggregate value, or (iii) require the Company to pay the difference in cash between the base price and fair market value. The exercise period commences upon the earlier of the date the shares first become eligible for public resale or the first anniversary of the closing date.
On February 24, 2026, the former TA Members delivered a notice exercising the Put Option and demanding that the Company repurchase all 96,774 shares in cash at the $3.10 per share Base Price. The Company declined to honor the exercise, believing the former TA Members are in breach of their obligations under the TA MIPA. Following unsuccessful discussions between the parties, the Company was notified on July 14, 2026 that the former TA Members had filed a Demand for Arbitration with the American Arbitration Association in Las Vegas, Nevada, asserting a claim for breach of contract and seeking damages of not less than $299,999.40, together with attorneys' fees, pre-judgment and post-judgment interest, and arbitration costs. See Part II, Item 1, “Legal Proceedings.”
The Company believes it has meritorious defenses and intends to defend the matter vigorously and to pursue available counterclaims. The Company cannot predict the outcome of the arbitration or reasonably estimate the amount or range of any possible loss at this time. If the matter is ultimately resolved against the Company, the Company could be required to pay up to approximately $300,000 in cash (exclusive of interest, fees, and costs), or to issue additional shares of common stock, which could adversely affect the Company's cash position and liquidity. The 96,774 shares remain classified as mezzanine equity, at a carrying value of $387,000, on the Company's condensed consolidated balance sheet.
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TA Pipeline adds a customer base of large group travel organizers, integrates its customer pipeline into NextTrip’s NXT2.0 booking technology and PayDlay financing tool, and creates cross-media leverage through JOURNY.tv and Travel Magazine Pro.
Acquisition of Five Star Alliance
On February 6, 2025, the Company entered into a Membership Interest Purchase Agreement (the “FSA Purchase Agreement”) with FSA Travel, LLC (“FSA”), John McMahon, as Majority Member, and the other members of FSA. On February 10, 2025, the Company completed an initial closing, purchasing a 49% ownership stake in FSA for $500,000 in cash plus 161,291 shares of Series O Nonvoting Convertible Preferred Stock. On April 9, 2025, the Company exercised its option to acquire the remaining 51% of FSA’s membership units for an additional $500,000 in cash plus 161,291 shares of Series O Preferred Stock, resulting in FSA becoming a wholly-owned subsidiary of the Company within the Travel segment.
On April 28, 2025, the parties determined that each of the four performance milestones under the FSA Purchase Agreement had been achieved, and in satisfaction of those obligations, the Company paid the FSA Members an additional aggregate of $400,000 in cash and issued an aggregate of 120,967 shares of Series O Preferred. In total, the Company paid aggregate cash consideration of $1,400,000 and issued an aggregate of 443,549 shares of Series O Preferred to the FSA Members in connection with the acquisition of Five Star Alliance.
Founded in 2004, Five Star Alliance is a premier luxury travel agency known for its curated collection of over 5,000 five-star hotels and resorts worldwide, with an industry-leading 4.9-star Trustpilot rating and over 400,000 monthly site visitors. Five Star Alliance offers personalized recommendations, high-end travel solutions, a proprietary booking engine, and established relationships with premium travel providers.
Blue Fysh Share Exchange
On February 24, 2025, the Company and Blue Fysh Holdings Inc. (“Blue Fysh”) entered into a share exchange agreement (the “BF Share Exchange Agreement”) whereby Blue Fysh agreed to issue 82 restricted shares of its common stock to the Company, representing a 10% interest in Blue Fysh, in exchange for 483,000 restricted shares of Series N Nonvoting Convertible Preferred Stock of the Company at an issuance price of $5.00 per share. The BF Share Exchange closed on February 28, 2025. Blue Fysh is focused on digital and network solutions connecting people to brands through thousands of digital installations in diverse environments across North America. The strategic partnership with Blue Fysh is intended to expand audience reach by integrating JOURNY.tv, Travel Magazine, and NextTrip’s booking platform with Blue Fysh’s digital out-of-home solutions, increase advertising revenue through combined media assets, and leverage Blue Fysh’s strategic sales relationships on behalf of NextTrip’s Media segment.
JOURNY.tv Asset Purchase
On April 1, 2025, the Company entered into an asset purchase agreement with Ovation LLC (“Ovation”), pursuant to which the Company purchased assets including trademarks, domains, apps, and certain distribution agreements related to Ovation’s JOURNY.tv business for $300,000 in cash and 20,000 restricted shares of Company common stock. In connection with the acquisition, the Company and Ovation also entered into a License Agreement pursuant to which Ovation granted the Company non-exclusive rights to exhibit JOURNY.tv programming through FAST and Video On Demand channels. The aggregate non-refundable license fee payable over the term of the License Agreement is $336,801.
NextTrip Cruise Launch
On March 27, 2025, NextTrip unveiled NextTrip Cruise, a fully integrated cruise booking engine within the Travel segment providing access to over 10,000 sailings and 35 cruise partners. Travelers benefit from exclusive pricing, concierge service, and bundled packages that include transfers, pre- and post-cruise stays, and expert travel support.
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Changes to the Board of Directors
On July 14, 2025, the Company’s Board of Directors adopted a resolution to increase the size of the board from five to seven members and appointed Bill Kerby, the Company’s Chief Executive Officer, and Andy Kaplan as directors to fill the newly created vacancies, in each case effective July 17, 2025. Mr. Kerby shall serve as a Class II director of the Company, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders, and Mr. Kaplan shall serve as a Class III director, with his initial term expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of Messrs. Kerby and Kaplan will serve as a director for the balance of their respective initial terms, and until his successor is elected and qualified, subject to his earlier death, resignation or removal. Additionally, effective July 17, 2025, the Board appointed Mr. Kaplan to serve as a member of the Nominations & Governance Committee of the Board.
Additionally, in accordance with the Board Appointment Rights provided for in the Exchange Agreement, on July 14, 2025, the Company’s Board of Directors appointed the NTH Appointees as directors, in each case effective July 28, 2025, at which time Salvatore Battinelli, Jacob Brunsberg, Dennis Duitch and Kent Summers resigned as directors of the Company. Stephen Kircher shall serve as a Class I director, with his initial term expiring at the Company’s 2028 Annual Meeting of Stockholders; Jimmy Byrd shall serve as a Class II director, with his initial term expiring at the Company’s 2026 Annual Meeting of Stockholders; and Ms. Diges and Mr. Jiang shall each serve as a Class III director, with their initial terms expiring at the Company’s 2027 Annual Meeting of Stockholders. Each of NTH Appointees will serve as a director for the balance of their respective initial terms, and until his or her successor is elected and qualified, subject to his or her earlier death, resignation or removal. Additionally, effective July 28, 2025 and as amended on March 3, 2026, the Board appointed the NTH Appointees to serve on the following committees of the Board:
| ● | Audit Committee: Carmen Diges (Chair), Stephen Kircher and Jimmy Byrd | |
| ● | Compensation Committee: David Jiang (Chair), Stephen Kircher, Jimmy Byrd and Carmen Diges | |
| ● | Nominations & Governance Committee: Andy Kaplan (Chair), David Jiang, and Carmen Diges |
Facilities
Our principal executive office is located at 1560 Sawgrass Corporate Parkway, Suite 400, Sunrise Florida 33323. The lease is on a month-to-month basis, and can be terminated by either party at any time.
Results of Operations
Three Months Ended May 31, 2026 Compared to the Three Months Ended May 31, 2025
| Three Months Ended May 31, | ||||||||||||
| Revenue by segment | 2026 | 2025 | % Change | |||||||||
| Media | $ | 40,952 | $ | - | - | |||||||
| Travel | 1,410,783 | 138,827 | 916 | % | ||||||||
| Total Revenue | $ | 1,451,735 | $ | 138,827 | 946 | % | ||||||
The increase in revenue of $1,312,908, or 946% for the three months ended May 31, 2026 vs. May 31, 2025 was primarily due to group travel-related revenues and cruise bookings. In addition, our Media segment generated revenue from direct advertising sales and programmatic revenues.
Our cost of revenue for the three months ended May 31, 2026 was $1,243,636, as compared to $99,921 for the same period in 2025, an increase of $1,143,715, or 1,145%. The increase was primarily attributable to the increase in sales from fiscal year 2026 as compared to fiscal year 2025.
Our gross margin for the three months ended May 31, 2026 was 14%, as compared to 28% for the same period in 2025. The decline in gross margin was primarily driven by a shift in the type of revenue we received, as revenue from higher-margin agent (commission) travel bookings and direct advertising sales declined relative to merchant-of-record travel bookings.
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Our total operating expenses for the three months ended May 31, 2026 were $3,121,852, as compared to $4,678,643 for the same period in 2025, a decrease of $1,556,791, or 33%. The decrease was primarily attributable to stock options granted to former directors and other non-cash professional services expenses incurred during the first quarter of fiscal year 2026, as further discussed below. Total non-cash expenses, primarily consisting of stock-based compensation, stock options granted to former directors, common shares issued to third parties for services, and depreciation and amortization totaled $889,388, or 28% of our operating expenses for the three months ended May 31, 2026, and $2,980,746, or 64% of our operating expenses for the same period in 2025.
Salary and benefits costs were $907,401 for the three months ended May 31, 2026, as compared to $696,914 for the same period in 2025, an increase of $210,487, or 30%. The increase was comprised of: (a) an increase in salaries of $151,043 due to the addition of seven new employees; (b) an increase in payroll taxes and benefits of $60,752; and (c) an increase due to the revaluation of the SAR liability of $7,453; partially offset by a decrease in bonus expense of $6,190, and a decrease in commission expense of $2,574.
Stock-based compensation was ($13,660) for the three months ended May 31, 2026, as compared to $138,325 for the same period in 2025. This decrease of $151,985, or 110%, was primarily due to options issued in the first quarter of fiscal year 2026, that did not recur in the first quarter of fiscal year 2027 and a true up of stock-based compensation to reflect the employee portion of payroll taxes.
We incurred general and administrative costs of $34,626 during the three months ended May 31, 2026, as compared to $30,588 in the same period in 2025, an increase of $4,038, or 13%. The increase was primarily the result of (a) $7,556 in license and filing fees primarily related to the renewal of travel licenses; (b) an increase of $5,586 for computers issued to new employees; (c) an increase in telephone expenses of $1,996; (d) an increase in payroll service fees of $1,889; partially offset by a decrease in travel expenses of $11,486 and a decrease in rent expenses of $1,503.
We incurred marketing costs of $134,848 during the three months ended May 31, 2026, as compared to $90,035 during the same period in 2025. The increase of $44,813, or 50%, was for (a) an increase in contracted services for marketing of $27,468; (b) increased Travel Magazine expenses of $66,950 aimed at driving traffic and generating business across all of our brands; and (c) an increase in social media expenses of $17,885 including a social media influencer agency. Partially offsetting the increase was a decrease of $62,500 in fees previously incurred from a former media advertising firm, and a decrease in advertising and promotional services of $5,050.
Professional service fees incurred in the three months ended May 31, 2026 were $1,286,371, as compared to $1,149,476 incurred during the same period in 2025, an increase of $136,895, or 12%. This increase was a result of: (a) an increase in consulting fees of $366,206 due to contracts for services related to business development, including our media segment; (b) an increase in legal fees of $45,435 due to services related to various regulatory filings and acquisitions; and (c) an increase in contract labor of $33,165 related to travel and other operations; partially offset by a decrease in investor relations expenses of $229,093 due to service contracts issued to investor relations firms in the previous year; a decrease in lending fees of $45,000 related to bridge loan financings during the first quarter of fiscal 2026; and a decrease in accounting expenses of $33,816 due to the FSA audit in the previous year. Of the total professional service fees of $1,286,371 for the three months ended May 31, 2026, $552,952, or 43%, was incurred as non-cash expenses, as compared to $632,413, or 55% for the three months ended May 31, 2025.
We incurred technology costs of $254,728 during the three months ended May 31, 2026, as compared to $321,815 during the same period in 2025. The decrease of $67,087, or 21%, was primarily attributable to: (a) a decrease in expenses in connection with JOURNY.tv of $85,582 primarily due to the previous contract with Dooya to get the channel in service; (b) a decrease in cloud database expenses of $9,270 primarily related to updating legacy code to optimize compatibility with our hosting infrastructure; and (c) a decrease in software and website expenses of $4,590 for hotel connections into the NextTrip database; partially offset by (a) an increase in dues and subscriptions of $21,277 due to the implementation of our new CRM and business management platform together with incremental seat licenses for newly onboarded employees; and (b) an increase in information technology expenses of $11,078 primarily due to onboarding additional employees, use of outsourced IT services, and managing software subscriptions.
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Organizational costs for the three months ended May 31, 2026, were $50,104, as compared to $1,999,670 for the same period in 2025, a decrease of $1,949,566, or 98%. The decrease is primarily attributed to stock options granted to former directors in the previous year.
Depreciation and amortization expense for the three months ended May 31, 2026 was $336,669, as compared to $206,650 for the same period in 2025, an increase of $130,019, or 63%. The increase was primarily due to commencing amortization upon the product launch of our FAST network, JOURNY.tv, and the Journy TV, FSA, TA Pipeline, and GoUSA acquisitions in the previous year.
Provision for credit loss expense for the three months ended May 31, 2026 was $65,561, as compared to $0 for the same period in 2025. The increase was in connection with expenses for NextTrip Privilege, Inc. and the Regulation A offering, and reflects an increase in the credit loss reserve due to the uncertainty of collectability of the receivable from NextTrip Privilege, Inc.
Other operating expenses were $65,204 for the three months ended May 31, 2026, as compared to $45,170 for the same period in 2025. The $20,034 increase, or 44%, was primarily due to increased merchant processing fees related to group travel.
During the three months ended May 31, 2026, we realized net other expense of $211,716, as compared to net other income of $193,812 in the same period in 2025. The increase in net other expense of $405,528 was primarily due to $540,245 received from NextTrip Group, LLC in the first quarter of fiscal year 2026 related to the NextPlay Technologies settlement, partially offset by a decrease in interest expense, a decrease in loss on extinguishment of liability, and a gain on the revaluation of the derivative liability in the first quarter of fiscal year 2027.
Preferred dividends for the three months ended May 31, 2026 were $19,691, as compared to $64,463, for the same period in 2025, a decrease of $44,772, or 69%. The decrease was due to dividends paid to the holders of shares of Series L and Series M Preferred stock in the first quarter of fiscal year 2026, which shares were converted to common shares in November 2025.
| Three Months Ended May 31, | ||||||||||||
| Operating loss by segment | 2026 | 2025 | % Change | |||||||||
| Media | $ | (626,015 | ) | $ | (192,069 | ) | (226 | )% | ||||
| Travel | (214,946 | ) | (398,828 | ) | 46 | % | ||||||
| Total segment operating loss | (840,961 | ) | (590,897 | ) | (42 | )% | ||||||
| Corporate | (2,072,792 | ) | (4,048,840 | ) | 49 | % | ||||||
| Total Operating loss | $ | (2,913,753 | ) | $ | (4,639,737 | ) | 37 | % | ||||
The decrease of $1,725,984, or 37% in operating loss in the first quarter of fiscal year 2027 as compared to fiscal year 2026 was primarily due to a decrease in corporate expenses of $1,901,048 as a result of stock based compensation issued to board members in the first quarter of fiscal year 2026. The increase in the operating loss of the Media segment of $358,946 is due to the start-up of operations and is primarily made up of contracted services in connection with our FAST channel. The decrease in operating loss for the Travel segment of $183,882 is due to the increased revenues from the Five Star Alliance and TA Pipeline acquisitions.
The decrease of $11,307 in the net loss on the share of net earnings from the equity method investment was due to losses incurred in FSA from March 1, 2025 through April 9, 2025 when the full acquisition was finalized.
Our net loss applicable to common stockholders for the three months ended May 31, 2026, was $3,145,160, as compared to $4,521,695 for the same period in 2025, a decrease of $1,376,535, or 30%. The decrease was primarily attributable to a decrease in operating loss of $1,725,984, a decrease in preferred dividends of $44,772, and decrease in the loss on the 49% share of net earnings for the equity method investee of $11,307; partially offset by an increase in Other Expense of $405,528 due to a settlement agreement between NextTrip Group, LLC and the Company related to the NextPlay Technologies, Inc. promissory note receivable that resulted in other income in the previous year.
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Liquidity and Capital Resources
Overview
We have historically funded our operations through private placements of our securities, short-term promissory notes, and advances from related parties. Given the limited revenue generated since inception, our principal sources of liquidity continue to be cash on hand and external financing rather than cash generated from operations. Our principal short-term uses of cash are operating expenditures, including personnel, technology development, sales and marketing, professional fees, and integration costs related to our recent acquisitions. Principal longer-term uses of cash include scheduled debt service, payment of accrued interest, and additional investment in our travel and technology platforms.
As of May 31, 2026, we had cash of $803,490 and a working capital deficit of $1,599,429, as compared to cash of $1,696,090 and a working capital deficit of $761,004 as of February 28, 2026. The increase in our working capital deficit was primarily attributable to growth in accrued interest, accrued professional fees, and current maturities of short-term promissory notes, partially offset by the increase in cash from financing activities. As of May 31, 2026, the aggregate outstanding balance on our short-term promissory notes, including accrued interest, totaled $1,180,171, and the balance on our related-party line of credit totaled $3,029,589 including accrued interest. Additionally, the Series B Convertible Preferred shares are redeemable on August 30, 2026, in the amount of $1,164,447 including accrued interest, unless such redemption is extended to December 31, 2026 at the option of the investor.
Going Concern — Substantial Doubt and Management’s Plans
Conditions giving rise to substantial doubt. In accordance with Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements — Going Concern, management evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. As of May 31, 2026, we have incurred recurring net losses, have negative cash flows from operations, have an accumulated deficit, have a working capital deficit, and have generated limited revenue since inception. For the three months ended May 31, 2026, we incurred a net loss of $3,125,469 (before preferred dividends) and used $2,343,339 of cash in operating activities. Based on our current operating plan, we estimate that we will require a minimum of $5.5 million of cash to fund existing operations for the twelve months following the issuance date of these financial statements, which exceeds our cash balance of $803,490 as of May 31, 2026. These conditions and events, considered in the aggregate, raise substantial doubt about our ability to continue as a going concern within one year after the date that these financial statements are issued.
Management’s plans. To address the conditions described above, management’s plans include the following: (i) continuing to raise capital through public and private placements of equity and equity-linked securities, including our offerings of common stock, Convertible Preferred Stock, (and including other subsequent-event issuances that have generated aggregate gross proceeds of approximately $743,000 through the date of this Quarterly Report); (ii) drawing on related-party financing arrangements as available (under which $950,000 of principal was outstanding as of the date of this Quarterly Report, with respect to the short-term promissory note issued to The Donald P. Monaco Insurance Trust on March 25, 2026, as amended) and seeking new debt financing on commercially reasonable terms; (iii) integrating recently acquired businesses (TA Pipeline LLC, FSA, JOURNY.tv, and GoUSA) to accelerate revenue generation and expand our distribution channels; (iv) managing discretionary operating expenditures, including selectively deferring non-essential technology and marketing spend; and (v) pursuing strategic partnerships intended to monetize our travel and content assets. Management is in active discussions with prospective investors and lenders, but no commitments have been received as of the issuance date of these financial statements.
Management’s conclusion. Although management believes that its plans, if successfully executed, would provide sufficient liquidity to fund operations for the next twelve months, these plans are not entirely within the Company’s control. The ability to consummate additional financings on acceptable terms, generate sufficient revenue from acquired businesses, and otherwise execute on management’s plans cannot be considered probable as of the issuance date of these financial statements. Accordingly, management has concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
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Sources of Liquidity
Our principal sources of liquidity during the three months ended May 31, 2026 consisted of: (i) net proceeds from private placements of common stock, preferred stock, and warrants; and (ii) issuances of short-term promissory notes (including original-issue-discount notes). During the quarter, we received aggregate gross proceeds of $1,315,100 from private placements of equity and equity-linked securities, $157,000 from the sale of short-term promissory notes, and $600,000 in the form of a promissory note from the Donald P. Monaco Insurance Trust, a related party. We do not currently have any committed external sources of capital, other than the MIP Line of Credit, which is fully drawn.
Amounts noted reflect gross proceeds received by the Company which were reduced by original issue discounts, placement agent fees, and other offering expenses, as applicable. The March 25, 2026 transaction with Donald Monaco and the April 15, 2026 transaction with KC Global Media Asia, LLC are related-party transactions. Mr. Monaco is a director and Andy Kaplan, a director, is the co-trustee of the Kaplan-Wright Family Trust, which owns 50% of KC Global Media Entertainment LLC, which in turn owns 100% of KC Global Media Asia, LLC; Mr. Kaplan also serves as chairman of KC Global Media Asia, LLC. These transactions were entered into on substantially the same terms as the contemporaneous transactions with unaffiliated investors.
March 24, 2026 — 1800 Diagonal Lending Note
On March 24, 2026, we issued a short-term promissory note to 1800 Diagonal Lending LLC in the principal amount of $180,550. The note includes an original issue discount of $23,550 and bears a one-time interest charge of 13%, which was applied to the principal on the issuance date. The note is payable in five installments, with the first installment of $102,011 due on September 30, 2026 and four equal subsequent installments of $25,503 due on the 30th day of each of the next four months. The note may be prepaid at any time without penalty. Upon an event of default by the Company, any unpaid principal and interest may be converted into shares of our common stock at the election of 1800 Diagonal Lending LLC.
March 25, 2026 — Donald P. Monaco Insurance Trust Short-Term Promissory Note (related party)
On March 25, 2026, the Company issued an unsecured short-term promissory note (the “Monaco Trust Note”) in the original principal amount of $80,000 to The Donald P. Monaco Insurance Trust (the “Trust”), the trustee of which is Donald P. Monaco, the Chairman of our Board of Directors. The Monaco Trust Note bears interest at 7.5% simple interest per annum and was originally scheduled to mature on April 3, 2026. The Monaco Trust Note may be prepaid at any time without penalty. The Monaco Trust Note was approved by the Board, including the independent members thereof.
The Monaco Trust Note has been amended to increase the principal amount and extend the maturity date, as follows: (i) on April 6, 2026, the Company and the Trust entered into a First Amendment increasing the principal balance to $155,000 and extending the maturity date to April 13, 2026; (ii) on April 9, 2026, the Company and the Trust entered into a Second Amendment increasing the principal balance to $290,000 and extending the maturity date to April 30, 2026; (iii) on April 27, 2026, the Company and the Trust entered into a Third Amendment increasing the principal balance to $400,000 and extending the maturity date to May 31, 2026; (iv) on April 30, 2026 the Company and the Trust entered into a Fourth Amendment increasing the principal balance to $510,000; (v) on May 12, 2026, the Company repaid $110,000 of principal under the Monaco Trust Note; and on May 29, 2026 the Company and the Trust entered into a Fifth Amendment increasing the principal balance to $600,000. Other terms of the Monaco Trust Note remained unchanged under each amendment. As of May 31, 2026, $600,000 of principal remained outstanding under the Monaco Trust Note. The 7.5% interest rate, which is lower than the 12% rate borne by the MIP Line of Credit, reflects the short-term, on-demand nature of the Monaco Trust Note. The Monaco Trust Note, including each amendment, was approved by the Audit Committee of the Board and the full Board, including the independent members thereof.
April 15, 2026 — Series A Convertible Preferred Stock Sale to KC Global Media Asia, LLC (related party)
On April 15, 2026, we entered into a securities purchase agreement with KC Global Media Asia, LLC pursuant to which we issued and sold 16,667 shares of Series A Convertible Preferred Stock at a purchase price of $3.00 per share, for total proceeds of $50,000, together with a warrant to purchase up to 8,333 shares of common stock at an exercise price of $3.00 per share, expiring 3.5 years from the issue date. As described above, Andy Kaplan, a director of the Company, serves as chairman of KC Global Media Asia, LLC; accordingly, this transaction is a related-party transaction. The transaction was approved by the Audit Committee of the Board and the full Board, including the independent members thereof.
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May 6, 2026 — Helena Global Series B Preferred Private Placement
On May 6, 2026, we entered into a securities purchase agreement with Helena Global Investment Opportunities 1 Ltd (“Helena”) pursuant to which we issued and sold 368,421 shares of newly designated Series B Convertible Preferred Stock (the “Series B Preferred”) at a purchase price of $2.755 per share, together with an additional 40,000 shares of Series B Preferred issued as an issuance fee, for total proceeds of $1,015,000. In addition, we issued to Helena a five-year warrant to purchase up to 100,000 shares of common stock at an exercise price of $2.755 per share and may be exercised on a cashless basis if there is no effective registration statement in place and if there is an Event of Default pursuant to the terms of the Certificate of Designation and is continuing.
The Series B Preferred (i) ranks pari passu with our other series of preferred stock and senior to our common stock with respect to dividends and distributions on liquidation; (ii) carries a cumulative cash dividend of 12% per annum, increasing to 18% per annum upon an event of default; (iii) is convertible into shares of common stock at a conversion price of $2.755 per share, subject to customary beneficial ownership limitations; and (iv) is subject to mandatory redemption at the stated value plus accrued and unpaid dividends on August 30, 2026, unless the holder elects in writing to extend the redemption date to December 31, 2026.
In addition, Helena was granted (i) a right of participation of up to 20% of any future securities offering by the Company (other than exempt issuances); (ii) an exchange right pursuant to which Helena may exchange Series B Preferred for offered securities at 100% of stated value; and (iii) registration rights pursuant to which the Company is required to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon conversion of the Series B Preferred and exercise of the related warrant within 15 days after closing, and to use best efforts to cause such registration statement to become effective within 30 days (or 60 days if the SEC reviews) after closing. The Company has also agreed that, during the 180-day period following closing, Helena may require the Company to apply 25% of the net proceeds of any “at the market” offering to redeem outstanding shares of Series B Preferred at the contractual redemption price. Additional terms of the Series B Preferred are set forth in the Certificate of Designation filed with the Nevada Secretary of State and described in our Current Report on Form 8-K filed with the SEC on May 8, 2026.
The Company’s obligations under the Series B Preferred are secured by a pledge of 1,365,314 shares of common stock owned by William Kerby, our Chief Executive Officer. Net proceeds are being used for general working capital purposes. Helena is not a related party. The $2.755 per share purchase price represented the Nasdaq Minimum Price plus $0.125 as of the date of the related securities purchase agreement.
May 6, 2026 — Common Stock Sale to a Private Investor
On May 6, 2026, we entered into a securities purchase agreement with a private investor pursuant to which we issued and sold 36,400 shares of common stock at a purchase price of $2.75 per share, together with a three-year warrant to purchase up to 18,200 shares of common stock at an exercise price of $2.75 per share, for total proceeds of $100,100. The investor is not a related party.
May 8, 2026 — Common Stock Sale to KC Global Media Asia, LLC (related party)
On May 8, 2026, we entered into a securities purchase agreement with KC Global Media Asia, LLC pursuant to which we issued and sold 18,182 shares of common stock at a purchase price of $2.75 per share, for total proceeds of $50,000, together with a warrant to purchase up to 9,091 shares of common stock at an exercise price of $3.00 per share, expiring on May 8, 2029. As described above, Andy Kaplan, a director of the Company, serves as chairman of KC Global Media Asia, LLC; accordingly, this transaction is a related-party transaction. The transaction was approved by the Audit Committee of the Board and the full Board, including the independent members thereof.
May 26, 2026 — 1800 Diagonal Lending Note
On May 26, 2026, we issued a short-term promissory note to 1800 Diagonal Lending LLC in the principal amount of $172,500. The note includes an original issue discount of $22,500 and bears a one-time interest charge of 13%, which was applied to the principal on the issuance date. The note is payable in five installments, with the first installment of $97,462 due on November 30, 2026 and four equal subsequent installments of $24,366 due on the 30th day of each of the next four months. The note may be prepaid at any time without penalty. Upon an event of default by the Company, any unpaid principal and interest may be converted into shares of our common stock at the election of 1800 Diagonal Lending LLC.
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Chief Executive Officer Compensation Deferral (related party)
William Kerby, our Chief Executive Officer, has agreed at his election to defer $100,000 of his annual salary, together with payments related to personal financial guarantees and his car allowance. As of May 31, 2026, the aggregate compensation deferred by Mr. Kerby totaled $308,334. The deferred amounts accrue interest at a rate of 7.5% per annum. The Company’s ability to retain these deferred amounts as a source of working capital is contingent on Mr. Kerby’s continued election to defer payment.
Material Cash Requirements
Our material cash requirements as of May 31, 2026 consist principally of short-term promissory notes, accrued interest, and the outstanding balance on the MIP Line of Credit. Short-term promissory notes outstanding at May 31, 2026 had an aggregate repayment amount due of approximately $1,180,171 and a carrying value, net of unamortized discount, of $946,817, with maturities through March 31, 2027, including the September 26, 2025, October 24, 2025, March 24, 2026 and May 26, 2026 1800 Diagonal Lending notes (which amortize in installments), the Donald P. Monaco Insurance Trust note, as amended, which matures on July 15, 2026 and the October 17, 2025 notes issued to two private investors (maturing November 17, 2026, as amended). The MIP Line of Credit has an outstanding principal balance of $3,000,000, with all principal and accrued interest due at the May 31, 2028 maturity date, as amended. Interest accrues at 12% per annum and is payable monthly. Additionally, the Series B Convertible Preferred shares are redeemable on August 30, 2026, in the amount of $1,164,447 unless such redemption is extended to December 31, 2026 at the option of the investor.
We have ongoing operating cash requirements for personnel, technology development, marketing, professional fees, and acquisition integration. Based on our current operating plan, we estimate that cash required to fund operations for the twelve months following May 31, 2026 will be approximately $5.5 million, which exceeds our cash balance at May 31, 2026. We do not have any material commitments for capital expenditures, and we do not have any material purchase obligations, take-or-pay contracts, or unconditional purchase obligations outside the ordinary course of business. We have no off-balance sheet arrangements (within the meaning of Item 303(b)(1)(ii) of Regulation S-K) that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
| Cash Flow Analysis | ||||||||||||||||
| Three Months ended May 31, | 2026 | 2025 | Change ($) | Change (%) | ||||||||||||
| Net cash used in operating activities | (2,343,339 | ) | (1,042,658 | ) | (1,300,681 | ) | (125 | )% | ||||||||
| Net cash used in investing activities | (237,561 | ) | (1,281,503 | ) | 1,043,942 | 81 | % | |||||||||
| Net cash provided by financing activities | 1,688,300 | 1,392,700 | 295,600 | 21 | % | |||||||||||
| Net increase (decrease) in cash | (892,600 | ) | (931,461 | ) | 38,861 | 4 | % | |||||||||
Net Cash Used in Operating Activities
Net cash used in operating activities totaled $2,343,339 during the three months ended May 31, 2026, compared to $1,042,658 during the same period in 2025, an increase of $1,300,681, or 125%. The operating cash outflow during the current period was driven by a net loss of $3,125,469 (before payment of preferred dividends), partially offset by non-cash charges of $949,494 and further increased by net changes in working capital of $167,364. Non-cash charges included depreciation and amortization of $336,669, amortization of debt discount of $113,533, and shares issued for professional services of $552,952, partially offset by a reversal of employee stock-based compensation of $13,660 and a gain on the derivative liability revaluation of $40,000. Changes in working capital primarily reflected a decrease in deferred revenue of $807,464 and an increase in accounts receivable of $133,207, partially offset by an increase in accounts payable and accrued expenses of $439,724 and a decrease in prepaid expenses of $344,626.
Net Cash Used in Investing Activities
Net cash used in investing activities was $237,561 during the three months ended May 31, 2026, compared to $1,281,503 during the same period in 2025, a decrease of $1,043,942, or 81%. Investing outflows in the current period consisted entirely of capitalized software development costs of $237,561. In the prior-year period, investing activities consisted of $81,503 in capitalized software development costs, $900,000 paid for the FSA Travel LLC acquisition, and $300,000 for the JOURNY.tv asset purchase.
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Net Cash Provided by Financing Activities
Net cash provided by financing activities was $1,688,300 during the three months ended May 31, 2026, compared to $1,392,700 during the same period in 2025, an increase of $295,600, or 21%. Financing activities in the current period consisted of $1,015,000 of gross proceeds from our Series B Convertible Preferred Stock offering ($895,000 net of $120,000 in related offering costs), $150,100 of proceeds from sales of common stock, $150,000 of proceeds from sales of preferred stock ($145,000 net of $5,000 in offering costs), $157,000 of proceeds from a bridge loan (offset by $258,800 of bridge loan repayments), and $600,000 of advances from a related party. In the prior-year period, financing activities consisted of $1,200,000 of advances from a related party and $192,700 of proceeds from notes payable.
Known Trends, Demands, Commitments, and Uncertainties
Need for additional financing. We will need to raise additional capital through equity, equity-linked, or debt financings, or through other arrangements, to support continuing operations and to execute our business plan. Our existing cash balance is not sufficient to fund our anticipated operating cash requirements for the next twelve months. There can be no assurance regarding the availability or terms of any additional financing. If we issue additional equity or equity-linked securities, our stockholders may experience material dilution, and any new securities may have rights, preferences, or privileges senior to those of our existing common stock. If we incur additional debt, the related instruments may impose covenants and repayment obligations that adversely affect our financial flexibility or business operations. If we are unable to obtain financing when needed, we may be required to delay, scale back, or eliminate one or more aspects of our business plan, including planned product and content investments, and we may lose our Nasdaq listing.
Nasdaq listing requirements. Our continued listing on the Nasdaq Capital Market requires compliance with applicable minimum bid price, stockholders’ equity, market value, and other continued-listing standards. Adverse developments in our operations or financial condition, or further dilutive issuances, could affect our ability to maintain compliance with these requirements. Failure to maintain compliance could result in delisting, which would adversely affect the liquidity of our common stock and our ability to raise additional capital.
Macroeconomic and geopolitical conditions. We are unable to predict the effect that broader macroeconomic conditions — including elevated interest rates, inflationary pressure on input and labor costs, fluctuations in consumer travel demand, foreign currency volatility, and geopolitical events such as the ongoing conflicts in Ukraine, Iran and Israel — may have on our access to the capital markets, our cost of capital, the timing and cost of our acquisitions, or consumer demand for our travel products. Continued unfavorable trends in these areas could increase our use of cash and impair our ability to obtain additional financing on acceptable terms.
Acquisition integration. We expect to continue to incur integration costs in fiscal 2027 as we combine acquired operations, technology, and content. These integration activities are intended to accelerate revenue generation, but the timing and magnitude of any related revenue contribution remain uncertain.
Subsequent Events Affecting Liquidity
On June 9, 2026, we sold a short-term promissory note to a private investor for $100,000. In connection with the note, we issued the investor a three-year warrant to purchase up to 25,000 shares of common stock at an exercise price of $2.75 per share. The maturity date of the note is August 8, 2026, and may be prepaid at any time without penalty.
On June 16, 2026, a private investor exercised a warrant to purchase 8,278 shares of common stock at $3.02 per share, resulting in gross proceeds of $25,000.
On June 18, 2026, David Jiang, a director, purchased 18,200 shares of common stock in a private placement at $2.75 per share resulting in gross proceeds of $50,050.
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The Donald P. Monaco Insurance Trust (the “Trust”) promissory note has been amended to increase the principal amount and extend the maturity date, as follows: On June 3, 2026 the Company and the Trust (the “Parties”) entered into the Sixth Amendment extending the maturity date to June 30, 2026; on June 8, 2026 the Parties entered into the Seventh Amendment increasing the principal balance to $700,000, and on June 30, 2026 the Parties entered into the Eighth Amendment increasing the principal balance to $950,000 and extending the maturity date to July 15, 2026. Other terms of the Monaco Trust Note remained unchanged under each amendment. As of the date of this Quarterly Report, $950,000 of principal remained outstanding under the Monaco Trust Note. The 7.5% interest rate, which is lower than the 12% rate borne by the MIP Line of Credit, reflects the short-term, on-demand nature of the Monaco Trust Note. The Monaco Trust Note, including each amendment, was approved by the Audit Committee of the Board and the full Board, including the independent members thereof.
On July 1, 2026, the Company entered into a short-term loan agreement with OnDeck for a principal amount of $275,000. The loan is repayable in eighteen monthly installments of $20,533 for a total repayment amount of $369,600. The origination fee was $6,875 and the total interest expense is $94,600 for a total loan cost of $101,475.
Trend in pricing. Our equity issuances during the three months ended May 31, 2026 were priced $2.75 per share. The subsequent-event common stock issuances were priced at $2.55 and $3.02 per share, respectively, representing a decline relative to fiscal year 2026 issuance prices. This pricing trend, if it continues, may increase the dilutive impact of future financings on our existing stockholders and may indicate continued pressure on our access to capital on favorable terms.
Other than the foregoing, no material subsequent events related to our liquidity and capital resources have occurred from May 31, 2026 through the date of this Quarterly Report.
Critical Accounting Estimates
Our discussion of critical accounting estimates that affect liquidity, capital resources, and results of operations is set forth in “Critical Accounting Estimates” elsewhere in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 2, “Summary of Significant Accounting Policies,” to the financial statements included elsewhere in this Quarterly Report.
Other Information
Other than the MIP Line of Credit and the related-party promissory notes described in Note 12, “Related Party Transactions,” to the financial statements included elsewhere in this Quarterly Report, we have no lines of credit or other financing arrangements.
We have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
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Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a 15(e) and 15d 15(e)) as of the end of the period covered by this Quarterly Report (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, where appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On July 13, 2026, Luis Barberi, Mitch Toren, and Ashish Tembe, the former members of TA Pipeline LLC, filed a Demand for Arbitration against the Company with the American Arbitration Association, to be conducted in Las Vegas, Nevada. The claim asserts breach of the Membership Interest Purchase Agreement dated August 6, 2025, based on the Company's alleged failure to repurchase 96,774 restricted shares of the Company's common stock at the $3.10 per share Base Price following the claimants’ February 24, 2026 exercise of a put right under the agreement. The claimants seek damages of not less than $299,999.40, together with attorneys' fees, pre-judgment and post-judgment interest, and arbitration costs. The Company believes the claimants are in breach of the agreement, believes it has meritorious defenses, and intends to defend the matter vigorously and to assert available counterclaims.
Other than as described above, from time to time, the Company is subject to various claims, disputes, and legal proceedings arising in the ordinary course of its business, including matters relating to employment, contractual, and commercial relationships. The Company is not currently a party to any other legal proceeding that management believes is reasonably likely to have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. Regardless of the outcome, litigation and other proceedings can have an adverse impact on the Company because of associated defense and settlement costs, the diversion of management resources, and other factors.
ITEM 1A. RISK FACTORS.
You should consider the “Risk Factors” included under Item 1A of our Annual Report on Form 10-K for the year ended February 28, 2026 filed with the SEC on May 29, 2026, as well as the following updated Risk Factor:
As of May 31, 2026, we had $803,490 in cash and a working capital deficit of $1,599,429. Our existing cash on hand and anticipated revenues are not sufficient to fund our anticipated operating costs. We will need to raise additional financing to fund our operations, maintain compliance with the Nasdaq continued listing requirements and implement our business plan. There is no assurance as to the amount and availability of any required future financing or the terms thereof. Such financing, if in the form of equity, may be highly dilutive to our existing stockholders and may otherwise include onerous terms. If in the form of debt, such financing may include covenants and repayment obligations which may be difficult to meet and that could adversely affect our business operations. We have no current understanding or arrangement to obtain any additional financing. To the extent that funds are not available to us, we may be required to delay, limit, or terminate our business operations and may lose our Nasdaq listing.
In light of the foregoing, there is substantial doubt about our ability to continue as a going concern for 12 months from the date of the filing of this Quarterly Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Proceeds received from the issuance of unregistered common and preferred shares and associated warrants have been used for general working capital purposes.
Common Stock
| Date | Recipient | Consideration | Shares | Price | Value | |||||||||||
| March 12, 2026 | Marc Bern | Consulting services | 7,500 | $ | 2.95 | $ | 22,125 | |||||||||
| March 14, 2026 | ConsortiaX | Sales commission override | 4,640 | $ | 2.50 | $ | 11,600 | |||||||||
| May 1, 2026 | Pillow Hog Ventures, Inc. | IR consulting services | 25,000 | $ | 2.75 | $ | 68,750 | |||||||||
| May 6, 2026 | Steve Kazas | Private Placement | 36,400 | $ | 2.75 | $ | 100,100 | |||||||||
| May 8, 2026 | KCGM Asia LLC | Private Placement | 18,182 | $ | 2.75 | $ | 50,000 | |||||||||
| May 13, 2026 | Balencic Consulting | IR consulting services | 35,000 | $ | 2.51 | $ | 87,850 | |||||||||
| Total | 126,722 | $ | 340,425 | |||||||||||||
Series A and Series B Convertible Preferred Stock
| Date | Purchaser | Consideration | Shares | Price | Value | |||||||||||
| March 12, 2026 | Marc Bern | Cash - Series A preferred, with Investment Warrants | 33,333 | $ | 3.00 | $ | 100,000 | |||||||||
| April 15, 2026 | KCGM Asia LLC | Cash - Series A preferred, with Investment Warrants | 16,667 | $ | 3.00 | $ | 50,000 | |||||||||
| May 6, 2026 | Helena Global Investment Opportunities 1 Ltd. | Cash - Series B preferred, with Investment Warrants | 408,421 | $ | 2.755 | $ | 1,125,200 | |||||||||
| Total | 458,421 | $ | 1,275,200 | |||||||||||||
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Investment Warrants
| Date | Grantee | Units | Strike | Expiration | Consideration | |||||||||
| March 12, 2026 | Marc Bern | 33,333 | $ | 3.00 | Sep 12, 2029 | Cash - Series A Preferred | ||||||||
| April 15, 2026 | KCGM Asia LLC | 8,333 | $ | 3.00 | Oct 15, 2029 | Cash - Series A Preferred | ||||||||
| May 6, 2026 | Helena Global Investment Opportunities 1 Ltd. | 100,000 | $ | 2.755 | May 6, 2031 | Cash – Series B Preferred | ||||||||
| May 6, 2026 | Steve Kazas | 18,200 | $ | 3.00 | May 6, 2029 | Cash – Common Shares | ||||||||
| May 8, 2026 | KCGM Asia LLC | 9,091 | $ | 3.00 | May 8, 2029 | Cash – Common Shares | ||||||||
| Total | 168,957 | |||||||||||||
Placement Agent Warrants
| Date | Grantee | Units | Strike | Expiration | Consideration | |||||||||
| May 6, 2026 | Craft Capital Management LLC designees | 29,473 | $ | 2.755 | May 6, 2031 | Placement agent - Helena Financing (1) | ||||||||
Stock Option
| Date | Grantee | Options | Strike | Expiration | Consideration | |||||||||||
| May 7, 2026 | Next Media Management, Inc. | 200,000 | $ | 2.64 | May 7, 2029 | Consulting services for JOURNY.tv | ||||||||||
(1) The warrants issued on December 23, 2025 were issued to Craft Capital Management LLC designees, as placement agent, as partial compensation for placement agent services rendered in connection with the Company’s Mayr 2026 private placement of securities to Helena Global Investment Opportunities 1 Ltd. (which financing was previously reported on a Current Report on Form 8-K). The Company also paid Craft Capital Management LLC. a cash placement agent fee equal to 8% of the gross proceeds of that financing.
Exemption from Registration
The securities described above were issued in reliance upon the exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering, except that the stock option granted under the Company’s 2023 Equity Incentive Plan was issued in reliance upon Rule 701 thereunder. No general solicitation or general advertising was used. Each recipient was an accredited investor or otherwise had access, through such recipient’s relationship with the Company, to the type of information that would have been provided in a registration statement and represented an investment intent. Other than the cash placement agent fee described in note (1) above, no underwriting discounts or commissions were paid by the Company in connection with these issuances.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During
the three months ended May 31, 2026, none of our directors or officers entered into,
ITEM 6. EXHIBITS.
| * | Filed herewith. |
| ** | Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
| *** | The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEXTTRIP, INC. | ||
| July 15, 2026 | By: | /s/ William Kerby |
| William Kerby | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| July 15, 2026 | By: | /s/ Frank Orzechowski |
| Frank Orzechowski | ||
| Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | ||
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ATTACHMENTS / EXHIBITS
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